H.E.R.O. | The Only Asian SMID-Cap Tech-Focused Fund To Discover & Invest in Innovators of Tomorrow, Today
The Innovators Fund is the only Asian SMID-cap tech-focused fund in the industry. H.E.R.O. stands for “Honorable. Exponential. Resilient. Organization.” and is operationalized into a unique, systematic 4-step investment process to identify the winners.
The investment objective seeks to capture long-term investment returns created by disruptive forces and innovation by focusing on high-quality listed equities in the Asia-Pacific region that ride on and benefit from them.
Through our cross-sector and in-depth fundamental research process, the Fund aim to provide access to companies whom we believe are run by high-integrity, honorable and far-sighted owner-operators with a higher sense of purpose in solving High-Value Problems for their target customers and society, and have unique, scalable and wide-moat business models with sustainable competitive advantages and innovative products, services, and processes to create, expand and service their total addressable market, including the resiliency and balance sheet strength to maintain or grow profitability, pricing power and market positions through up/downturns in the economy.
NOTE: The Innovators Fund is now in the pre-launch stage, subject to regulatory approval. All material are for educational purposes.
H.E.R.O., which stands for “Honorable. Exponential. Resilient. Organization.”, is operationalized into a unique, systematic 4-step investment process to identify the winners.
Proprietary forward-looking fact-based accounting fraud detection system; invited to present to Singapore’s top financial regulator MAS.
BrightTALK Webinar Presentation (12 July 2018) | Finding Value In Asia: Discovering Tech Innovators In An Exponential World
Thank you so much to everyone who had participated in our presentation at the BrightTALK webinar "Finding Value in Asia: Discovering Tech Innovators in an Exponential World" on 12 July.
We had received positive feedback from the participants, including our Catapult analytical framework to complement and rejuvenate the economic moat analysis to view the value creation process afresh and continually discover innovators creating, enabling and capturing new demand (vs exploiting existing demand) with exponential non-linear growth potential and value creation. The Catapult exponential projectile of the 4Cs are systematic observations and leading-indicator questions you can ask to analyze and assess the business models of exponential innovators. We are encouraged to persevere in our efforts to build a warm community of resilience, learning and exponential growth where entrepreneurs and investors support and encourage one another to navigate and thrive in this challenging world and we are grateful to have your support.
- For those who have missed the live webinar, this is the weblink to the replay: https://www.brighttalk.com/webcast/1570/328091
- Download the presentation slides: http://www.heroinnovator.com/wp-content/uploads/2018/07/BrightTALK-HERO_Finding-Value-In-Asia_12-July-2018.pdf.
Can the megacap tech elephants still dance? Or is this the better question: Is there an alternative and better way to capture long-term investment returns created by disruptive forces and innovation without chasing the highly popular megacap tech stocks, or fall for the "Next-Big-Thing" trap in overpaying for "growth", or invest in the fads, me-too imitators, or even in seemingly cutting-edge technologies without the ability to monetize and generate recurring revenue with a sustainable and scalable business model? How can we distinguish between the true innovators and the swarming imitators?
We see a distinct value opportunity in an exclusive group of under-the-radar Asian SMID-cap tech stocks who are exceptional market leaders in their respective fields with unique scalable business models run by high-integrity, honorable and far-sighted entrepreneurs with a higher purpose in solving high-value problems for their customers and society whom we call H.E.R.O. - “Honorable. Exponential. Resilient. Organization.”.
- Investing in exponential innovators = The most relevant language in value investing?
- Why are these exponential & exceptional innovators overlooked and mispriced winners and the most relevant multi-year investment trend and opportunity?
- The analytical framework to identify under-the-radar winners, including rejuvenating the defensive economic "moat" analysis by complementing with the more offensive “catapult” analysis, using this new lens to view the value creation process afresh and continually discover innovators creating, enabling and capturing new demand with exponential non-linear growth potential.
- Remaining skeptical and grounded in the Asian capital jungles and avoiding the investing pitfalls and traps of Asian-style accounting fraud and misgovernance which western-based fraud detection tools and techniques have not been adequately adapted to the Asian context.
- Selected case studies.
We look forward to open up a meaningful conversation with you to explore the H.E.R.O.'s journey together.
H.E.R.O. Investment Framework & Process to Identify the Winners
HEAR THE HEART OF THE H.E.R.O. | INSPIRING STORIES FROM H.E.R.O. INNOVATORS OF ASIA
Our curated collection of inspiring entrepreneurial stories of tech leaders in Asia whom we have been monitoring over the past decade in our broader watchlist of over 200 listed Asian tech companies and our focused portfolio of 40 HERO Innovators who reveal their problems and successes behind building the company. We aim to update with refreshing and uplifting new stories weekly.
Masaya Suzuki 鈴木雅哉 of Japan's MonotaRO Co. (TSE: 3064)
“Our logo is like the Momotaro in Japanese folk tale. Like Momotaro, we fight against unfair – the old distribution system." [Momotarō (桃太郎, "Peach Boy") is a popular hero of Japanese folklore and one of the most famous characters in Japan as an ideal model for young kids for his kind-heartedness, bravery, power, and care for his parents.]
“MonotaRO cherishes the environment where almost everyone can solve problems quickly. Create a hypothesis, change and verify.. It is much more fun to work at a company that has a lot of data when thinking about which areas to work on, whether the hypothesis drawn can be executed quickly and verified with speed. The system is made in-house so it's easy to make changes and I think that it is the best environment for people to grow.”
"Database marketing is one of the biggest factors supporting strong performance. Through data mining from the user's purchase history and browsing history and analyzing them, the analysis result is reflected in the search algorithm which enhances the search accuracy so that the product can be presented effectively from the range of over 15 million items. We are also doing effective recommendation such as ‘The person who bought the item A is also likely to buy item B. Analysis results are reflected not only in search algorithms, but also in mail magazine distribution and catalog layout, customer listing to ship, increasing the purchase rate. We are trying to personalize the site by personalizing the behavior of each user and by incorporating it into the program. We build a one-to-one relationship with the customer so that each product desired by the customer is appropriately shown. Because our business is B2B, your first priority is a more precise time than price. You can search for what you want in a short time, you can purchase immediately, and your ‘one stop’ purchase arrives quickly. This allows customers to spend time on their original work. This is the reason why we are supported by over 2.8 million customers. "
Ryusei Ono 大野龍隆 of Japan's MISUMI Group (TSE: 9962)
"The history of MISUMI is over half a century since its establishment in 1963. Prior to MISUMI entering the business, there are few standardized parts items to the ultra-precision parts that make up FA manufacturing equipment and molds, and ordering one by one with detailed drawings was commonplace. For manufacturing customers, it is hard to find suppliers with technological capabilities that can make parts first. Furthermore, there were various inefficiencies, such as taking estimates, meeting the specifications depending on the part, long delivery time, and high prices must be prepared. So, we standardized the major parts, looked at the web and paper catalogs, so that customers can order immediately by specifying the model number and dimensions. This process of making orders is called "Make to Order (MTO)" at MISUMI. Parts that can be ordered with MTO boast 80 sextillion items including variations in size. If you look at the catalog, the price and the delivery date are obvious at a glance. You no longer need to do drawings, and you no longer have to negotiate estimates and delivery dates.”
“In order for the manufacturing industry to comply with Industry 4.0, it is essential to standardize parts and further increase the electronic procurement rate. We need suppliers of production indirect materials that can respond to this promptly and the existence of platforms connecting them. However, there are not so many suppliers that can respond globally to these needs. We started EDI trading by digital data exchanges since the 1970s, sold CAD systems dedicated to mold design in the 1980s, and in the 2000s we had built an ordering system using the Internet. We are one of the few companies that has long been involved in the field of handling digital data and continues to innovate in this field constantly. We have a new service ‘meviy’ that can recognize the shape of parts and estimate and place an order based on the customer's 3D CAD data. About half of the machine parts are modeled, that is, standardized. For others, it is necessary to order drawings one by one. However, if you use "meviy" for ordering such parts, customers can easily order parts that are not standardized, eliminating inefficiencies. Thus, we are one of the few indirect production players that can deal with the trend of new manufacturing. For Misumi it is said that the biggest opportunity since its foundation is about to come.”
Shinichi Fujishiro 藤代真一 of Japan's Synchro Food (TSE: 3963)
“Looking at the web services provided by Synchro Food, it is easy to see the compelling convenience provided to our customers. To open and operate a restaurant in the conventional manner, you need to first of all look for a specialized property that is suitable, you need to visit a real estate agent, you then need to find the interior designers, you need to buy kitchen equipment, select ingredients suppliers, find the right people to take on the jobs. Even after the opening of the store, you need to attract customers, do promotion, handle accounting, do attendance management etc, which are all work waiting for you to solve. If you have a website that will provide compelling convenience in supporting them all at once, you will want to jump into it.”
“At that time, I really thought I am challenging what no one else is challenging. Since it is highly likely that the restaurant business will succeed if it can know the information of a good restaurant location before rivals, the property information was highly confidential... when the website is opened, only two to three companies registered the property. The business did not grow at all. It was harder than I thought to ‘earn money’ at the beginning, it felt depressing. There were days when I could not sleep. The challenge itself is courageous and wonderful, and if it fails, the trace will remain, so someone may be able to return it to society. After thinking so, my feelings have become brighter. I felt inspired by the pride that ‘I am contributing to society’. I did not start from the ambition to enlarge the company, I wanted to do something that no one was doing and want to provide new value added to the people involved in the restaurant establishments of the world. When people gather around for me, it is strange and my feelings get brighter."
“In our first year, we cannot reach a profitable level and I ask one of the fellow founders who is my cousin to work for another company. it was painful. Our server had also gone down, compounding the problems. It was a phone call that inspired me in this difficult situation. When the server went down and the web site stopped, we heard our customers tell us: "I am in trouble if there isn’t this service". It reminded me of the original intention of offering new services in the world and I realized again the importance of challenging things that nobody accomplished.”
Manabu Yamaki 山木学 of Japan's ItoKuro (TSE: 6049)
“In the past, it was possible to know the reputation of the cram school in the conversation between housewives, but now as the function of the local community has declined, it is difficult to obtain word of mouth information directly There are plenty of word-of-mouth information on our site, so it is useful from parents and it gets many users."
“We aim for “creation of new value” to provide a value that exceeds expectations by the leveraging of internet. Itokuro is started to focus on education because of my personal experience. As a student, I have limited time to study and my parents are constantly worried. Our value-add is towards parents of students studying in school to provide comparison.”
“The only thing that's important is that you are going to clear the work in front of your eyes daily. No matter how much you set a goal, after all, there is always one step before you, and you can never get over to the goal if you never overcome the wall in front of you.”
“Behind every employees at Itokuro is a thoroughly designed environment where everyone can grow. No matter how good a business plan exists, the company can not grow unless there is a person who can properly grow the business. We are making great efforts to create a mechanism to nurture talented people who have joined us as a new graduate to "grow the business" or "lead the company". Employees who entered as a new graduate have grown to become "business owners" or "management" at a young age. This "system for nurturing excellent talent" made this possible. I believe that is the biggest advantage of Itokuro. By carefully acquiring the viewpoints of managers who support the multiple projects they champion, we can carefully create a foundation for them to become an excellent businessman or manager. Foster young experiences involved in the whole project, receive feedback from experienced business managers and executives, and grow further. I am building up such a system.”
Atsushi Kawata 川田篤 of Japan's oRo (TSE: 3983)
"ZAC has supported numerous growth companies. Growth companies are likely to fall into problems when the internal management system cannot catch up with the growth speed of the company. Many growth companies continue to increase sales by using product strength as a weapon and neglect profit management. For instance, when sudden depression comes, the growth companies do not know what they are making is profitable and what they are losing. We have not been able to grasp the profit of each department or project. That's why we cannot make detailed verifications and improvements when our business performance deteriorates... It is important to build a system in the company that can unify all data such as estimates and invoices, information on customers and business partners, employee's working hours, and so on. Doing so eliminates the time and effort of double entry and improves data accuracy and operational efficiency. Also, in order to maximize profits, it is important to accurately manage ‘operating profit’ for each project. In this case too, you can calculate the operating profit for each project unit, employee unit, hour unit from these unified data, and verify it, so you can improve your business more efficiently. Furthermore, by sharing these data results with all employees, it will be possible to switch from a ‘sales focused’ to ‘profit oriented’ organization. ZAC is a system that can realize all these things. Profit management on the basis of opportunities becomes possible in real time. So, we will be able to know the numbers that management wants to know anytime. I do not need to ask the manager every time ‘I did not get any profit last month, but what went wrong?’ And the speed and precision of management decisions will increase and you will be able to create profits systematically. Besides, the operational risk of the administrative department will decline. Unnecessary invoices, uncollected accounts receivable, unpaid accounts payable, and other administrative department errors are drastically reduced. Since the operational efficiency of the management department improves, it also leads to reduction of personnel expenses. In the future, we will continue to improve ZAC and support client continued growth.”
“I think that growing is to stretch out. Therefore, in order to be able to stretch back at ease, we are trying to build a system that can be covered when something happens as an organization. Again, there is growth only when trying ‘what you cannot do’ instead of ‘what had already been done’. But, as it is likely to fail at the same time often, it may become a risk as a company. That is why, by organizing a backup system as an organization, we are trying to create an ‘environment that can experiment challenges with peace’.”
Takuji Iuchi 井内卓嗣 of Japan's AS ONE (TSE: 7476)
“I want to make AS ONE into a ‘good company’, a company that employees can tell from your heart to your most important person, son, daughter, wife, husband, best friend that ‘It is such a nice company, there is no one else!’ It is easy for employees to be feeling that even though the company is stable and there is no big dissatisfaction, there is no sense of fulfilment either. I want employees to feel that their time in the company, where they spend most of their life, is meaningful. To do that, we must first start with creating an atmosphere to express what we want to say freely and vigorously.”
“Our corporate motto is ‘innovation and creation.’ There is a corporate culture of trying new things constantly and differentiating it from other companies, not sticking to previous things. Since our establishment, our customers are people who aim to overcome various problems at the work site, including researchers. They have various specialized needs, such as they want a tool and equipment that can make the experiment in a vacuum state or under zero gravity. Our strength is to not only deliver these products seamlessly and speedily, but also to listen to such voices and respond to the needs. When listening to customer's problems, we developed products ourselves and we also became a manufacturer function. Currently the company’s in-house original products have risen to over 40% of the total sales and they also have a higher gross margin, and it is also a feature that we have both a manufacturer's position in the upstream and a retail position in the downstream.
Recently, we expanded into not only products but also into enriching our consulting functions. For example, instruments and analyzers used for research are required to be accurate. Once a year, it is necessary to perform calibration work to check the accuracy of the machine, but it is a difficult task to put out one by one to the manufacturer. Therefore, we are also developing services such as contracting entire calibration services for the factory and lab customer while they are on holiday. Because the burden on the site is reduced at once, we delighted the busy researchers. In this way, I think that there are more things we can do if we think from the viewpoint of resolving customers' troublesome times.”
Leo Huang 黃欽明 of Taiwan's Chroma ATE (TSEC: 2360)
“The information and communications technology (ICT) industry is rapidly developing and with growing complexity and complications. Precise electronic products and devices are just like humans, when we are sick we need health checks. Chroma ATEs measurement and automated inspection business plays the key role of "intellectual doctors" in the treatment of these incurable diseases and the resolution of pain points for our customers. Chroma ATE's vision is to become the world's first in the field of detection and inspection.”
“Chroma ATE has a close relationship with our customers. To become a first-tier customer’s business partner, we must have an insight into the customer's next-step development and design solutions that will be provided to customers as early as possible before the customer goes into mass production. The customer's research and development of the next generation of products will not only pull in Chroma ATE to grow, but Chroma ATE will also be able to stand on the shoulders of giants to grow.”
“All smart mobile phones with 3D sensing functions are being tested by Chroma ATE’s photonics measurement equipment system. As long as the mobile phone uses VCSEL (vertical-cavity surface-emitting laser), almost 100% will need to use Chroma ATE’s equipment. Chroma ATE will continue to invest in the photonics measurement market.”
“With the advent of the Industry 4.0 era, Chroma ATE can provide customers with one-stop auto purchasing services. In addition to the integration of optical, thermal control and electromechanical integration with big data services, Chroma ATE can provide automated measurement and big data analysis for manufacturers. For example, testing measurement generates a lot of data. Chroma ATE can provide a big data analysis platform to realize a complete Industry 4.0 service. This kind of service also differs from Taiwan's emphasis on a large number of manufacturing OEM business models.”
“With the rise of the clean energy industry, demands have remained strong for electric vehicles, lithium batteries and cloud servers. Revenues for our sophisticated electronic measuring instruments and system products have been steadily growing. The measuring equipment for electric vehicle batteries is a prime example of our efforts. In a 12ppm (production per minute: batteries produced per minute) electric vehicle battery production line, electricity consumption is reduced by 50% which is the equivalent of NT$8 million per year. Many people believe that, compared to gasoline, electricity is an excellent clean energy. However, what is not often mentioned is that during activation batteries go through several 20-hour cycles of charging and discharging. In other words, battery production actually consumes a substantial amount of electrical energy. For this reason, Chroma developed a battery formation system that effectively recycles electrical energy during production.”
Daisuke Sekine 関根大介 of Japan's OpenDoor (TSE: 3926)
“The origin of our company name OpenDoor was always from my strong desire to open the door to continue the challenge, seeking the possibilities of a new field at all times. Do not be afraid of new challenges, continue to contribute to society's richness, joy, and the future with constant innovation. Since our establishment in April 1997, we have steadily expanded our business and steadily continue to grow, but we believe that the root of this is the result of thoroughly looking at the customer's perspective and pursuing quality without compromise. Amongst them, Travelko is the pillar of our business and it is widely used as the largest travel comparison site in Japan, endorsed by the largest number of customers who use it and the largest number of travel-related companies published on the website. We open doors and will respond quickly to customer's needs through the Internet business in a wide range of fields and strive to maximize customer satisfaction. For that purpose, we will continue to challenge the realization of the business as the No.1 from the endorsement of both customers and markets, constantly seeking the possibilities of a new field with a venture spirit and we will continue to challenge ourselves further.”
“We have survived a fierce battle in the travel IT industry which experienced rapid change with many meta-sites competitors such as Venture Public (travel.jp), Kakaku.com, Recruit Group, trivago, Trip Advisor, and Travelko now occupies a solid position in the industry. Our comparative site Travelko has high accuracy and user convenience that other companies cannot follow. For each of our client companies, the attractiveness of Travelko is a big appeal and we have established a relationship of trust as a partner in a Win-Win relationship.”
"Especially because of the richness of products and price competitiveness, Travelko was supported by women from the ages of 20 to 34, and the number of users steadily increased without adding advertising expenses, and we are able to achieve high operating margin at over 28%. If you are at the same price, we are aiming to find the most enjoyable trip, so we post information on the site from the local living guide and information blog about the trip. We will actively disseminate information that you can take a walk even if you go to the city alone and we would like to link with the optional tour and use it for promotion.”
Michikatsu Ochi 越智通勝 & Takatsuga Suzuki 鈴木孝二 of en-Japan (TSE: 4849)
Chairman Ochi: “I quit an apparel maker, a company which I joined as a new graduate for two years, and then I was invited by my elder brother to join a food maker that he runs. My elder brother was very enthusiastic about employee education, so I began to be interested in employee education. And at the age of 29, I switched to a major education consulting company. I was planning to work for the rest of my life at that company, but one night, I had a phone call from my elderly mother who asked me to return home to Ashiya. And at the age of 32, I decided to return to Ashiya, and I started the Nippon Brain Center in Kansai. As a representative of Recruit Co’s advertisements, Nippon Brain Center became the No. 1 Kansai dealer in its 10 years of establishment and grew to 120 employees and sales exceeded 3 billion yen. And, in anticipation of the coming of the Internet, in 1995 we set up the Digital Media Division in the company and started a recruitment job information service using the net. en · Japan was founded in January 2000 to make its division independent.”
Chairman Ochi: “I would like to continue to grow as a company with social justice and identity. We are not simply about making money, we are doing business with social justice. I have not grown the company to such a size and scale in sales, profit and employee size by motivating people with profits, but I purely managed this with social justice.”
Chairman Ochi: “Since our founding in 2000, En · Japan has been committed to the mission of “success after joining the company." We do not merely manage the moments of recruitment and recruitment as goals, but also operate businesses aimed at enhancing "employee contribution to corporate performance“. For that purpose, we have worked on the planning and development of services, with a focus on businesses that will truly benefit job seekers and companies. By linking services in the three areas of adoption of optimal human resources, effective education, and highly satisfying evaluation, we will realize the success of human resources and the improvement of corporate performance. We have named this unique method "3E method“. Now is the time when the idea of "success after joining" is lived. With our unique service, we will contribute to creating a society where business people can demonstrate higher performance.”
CEO Suzuki: “I was born and raised in a small island in Ehime prefecture, an area for the shipbuilding industry. In the 1980s many people who worked in the shipyard lost their jobs and wander the streets due to a serious shipbuilding depression. My father also got restructured. Because I saw such a sight at the time of my middle school and high school, the feeling that work is important is always at the back of my mind. I felt there is social significance in the human resources business and thought about pursuing it as my profession. I joined the Nippon Brain Center, the predecessor of En Japan, after graduating from the Doshisha University School of Commerce in 1995. Chairman Ochi talked about the human resource strategy of each industry as a lecturer, based on our philosophy of human growth. I got hired by the sense of excitement that Chairman Ochi inspired whom I met in the interview and decided to join the company.”
CEO Suzuki: “Our starting point is to thoroughly devote ourselves to job seekers and to communicate the appeal of companies from an objective standpoint. By doing so, we pleased job seekers and the companies by reducing mismatches, and we provide thorough services that help in the success after joining of the workers for companies.”
Dr. Wang Kuang-Hsia 汪光夏 of Taiwan's Machvision (GTSM: 3563)
“Success comes from building a happy enterprise. Prayers give me a good image telling me to build a happy company.” [Wang is a devout Christian] I hope my employees will be able to take care of their families. If you sell your liver all day long, you can't take care of the family."
“I used to be a teaching professor. [Wang holds a double master degree in electrical engineering and industrial engineering, and a Ph.D. at the famous University of Pennsylvania. Wang has not only published more than 40 academic papers in the Institute of Electrical and Electronics Engineers (IEEE) journals, but also has more than 40 individual invention patents.] Back then, I observed that although Taiwan has already taken the lead in the electronics industry, foreign companies that include Orbotech, Camtek, Cognex, KLA-Tencor and Keyence Japan dominate the automated optical inspection (AOI) instrument market that is crucial for the electronics industry. In 1997, I published a paper explaining that the era of AOI equipment and machine vision system is approaching. The combination of four key technologies is the key, namely optical acquisition systems, image processing, precision mechanics, and electro-optics and motion control. These four items are simple to say, but they need to be integrated. Optical inspection is actually most commonly used in four major industries: semiconductors, packaging, PCBs, and SMT. I decided to start a business focusing on the PCB where local brands had poor reliability. We quickly gained praise in the industry with higher cost performance and reliability. I first introduced a new generation of products to reduce testing time by a factor of 7, which cuts manpower costs and saves space by seven times. In the past, manufacturing clients might increase the number of machines or double the speed. However, this innovative technology combined many new applications, including achieving the detection effect while the product is still in the process of moving, which requires a combination of multiple technologies. Why Machvision can have so many technologies is because of the past experience and knowledge accumulated from our different customer requirements which bear fruit in this new product. Therefore, international companies will not only fail to catch up, but will also abandon the PCB field. We went on to dominate the PCB field. With our optical, electronic control and software technologies, we can provide customers with one-stop solution integration services."
“We have incorporated ‘sports marketing’ to forge closer relationship between the company and our customers, and it brings positive energy to the operation. For example, when we visit customers in mainland China, it is natural to create a common topic without drinking alcohol. It is no longer just asking the other party to order or talk about the status of the machine. The customer usually initiates with a humorous opening, saying things such as ‘There is no problem with the order and machine. The problem is that we are unable to register for the badminton match’, or ‘You and your staff are very good at badminton but we will win next time’ and so on. We also employ outstanding sports talents and train them to become our sales consultants and they perform well at work to really score for the company."
Masaki Hojo 北條正樹 of Japan's Daifuku (TSE: 6383)
“Special technology is required because the factory or automated logistic warehouse are required to operate for 24 hours in order to raise the occupancy rate. The quality of material handling also greatly contributes to the yield rate of the final product. Our company visualizes factory operation status on a monitor, and monitors where trouble occurred and aims to raise the occupancy rate to the maximum. These technologies have been accepted and adopted by factories in the world's leading semiconductor and electronics companies, data centers, automobile manufacturing, and so on, as the mainstream system so far.”
“Amazon is actively investing and we’re supplying machines that are profitable. In Japan, retailers like Nitori Holdings Co., which sells furniture, is making big investments to set up new distribution centers for operational efficiency. In China, companies like Alibaba and Tencent are investing. South Korea will catch on, taking cues from Japan, and while it will take time for India’s e-commerce market to develop, it’ll be a big market once it does.”
“We have to be able to come up with various suggestions for clients. It’s not simply going to be about hardware or software but about providing a high value-added system equipped with cutting-edge technology. Otherwise, we can’t be a real champion. Health care, biotechnology and agriculture are among the industries Daifuku could tap. We’re going to try and see if a type of power-supply machines used in chip factories could be put to use in the biotechnology industry.”
Takateru Kawano 河野貴輝 of Japan's TKP Corp (TSE: 3479)
“In 2005, TKP founded as a pioneer of the B2B sharing economy. TKP stands for Total Kukan Produce, borrowing and leasing idle real estate from a real estate owner, renewing it as a conference room and offering it reasonably to users. Since then, we have built up our own nationwide network, and we now provide corporate conference and banquet room spaces in five quality grades. We directly managed the total number of 1,919 conference rooms in Japan, with operations in five cities around the world, for over 24,000 companies and more than half of listed companies in Japan are TKP users and the repeat ratio is around 85%. Expanding beyond our roots in renting conference rooms, in recent years we have also built up a business of renovating hotel banquet halls. Under the TKP Garden City brand, we provide hotel- quality conference rooms and banquet halls. We also respond to sophisticated customer needs in the food and beverage industry, and offer various optional services. As many conference-goers also require accommodation, we have also begun operating lodging facilities near our conference rooms in major metropolitan areas. With office prices trending upward in recent years, fewer companies are setting aside large conference areas within their own office spaces. Conversely, the importance of having spaces to foster interpersonal communications is growing. We aim to resolve this dilemma. From our start in providing rental conference rooms for corporate customers, we regenerate and add value to idle property. As a “company that renovates and redistributes space”, we contribute to society by offering comfortable places, spaces and times.”
“If a kite gets on the flow of the world economy, it will rise. For a business, if the yarn is short, it does not rise high. If you ride a good wind, the kite may easily climb high, but if it gets too high, the thread may break, and the kite itself may break by wind pressure. I would like to make the company bigger. However, when the company got bigger, I think that it is important that the ownership mentality is clear. The super business is a company that grows great while holding the soul of entrepreneurship. I cannot do it alone to thicken the kite's thread, the soul of a venture. Each employee must have a ‘soul of an entrepreneur’, and it is necessary to fully enjoy the work he or she desires. Let's raise a big kite, fly high together!”
"I was influenced to go into commerce by my grandfather who was doing business in Beppu and ran a sporting goods store by the ocean. I helped him all the time during the summer vacation, so I started to like business. While I was a child, I always thought that there are few goods and customers do not come at all. I took the initiative to attract customers, organizing a competition and giving away prizes such as gloves for first prize and so on. When my grandmother got back, she was very angry with me, and I could not understand why. My grandfather explained to me that he was collecting orders from organizations using catalog sales and all the items listed in the catalog can be purchased at a discount. Since the store is a showroom, it is only necessary to place items that are limited, and there is no need for visitors. It's a wonderful business model that there is no inventory risk in order sales. I was surprised because I had never thought about such a thing. From that time, my grandfather had been ahead of the era, about three steps, rather than half a step.”
Dr. Noriyuki Mifuni 三船法行 of Japan's TOCALO (TSE: 3433)
“TOCALO is the low-profile company behind the success of Tokyo Electron’s global leadership in dry etching and photoresist processing (ashing) semiconductor production equipment (SPE) to produce insulating film, which is critical for the mass production of 3D NAND flash memory. Previously cyclical semiconductor investment now involves more than PCs and smartphones with a greater number of end markets driving demand for semiconductor for cloud servers used in data center, IoT (Internet of things), big data, electronification of smart cars, artificial intelligence, creating a shortage of 3D NAND flash memory chips. Special equipment needed for producing 3D NAND flash memory is in especially short supply, leading chipmakers to scramble for machinery from Tokyo Electron. Tokyo Electron also holds a near-monopoly on equipment for dry etching circuit patterns onto silicon wafers. In manufacturing processes for 3D NAND flash memory devices, four or five additional etching machines are required for each new layer. 64 layers, for example, adds up to 300 etching machines. In semiconductor production equipment, TOCALO’s unique high performance coating contributes to substantial productivity improvement and has earned high praise from customers. In the semiconductor etching equipment, TOCALO has developed a new high-performance ceramic-based thermal spraying coating to protect the base material from the etching gas, improve the durability of the chamber and electrostatic absorption mechanism of the electrostatic chuck for holding and fixing the wafer in the plasma etching equipment.”
"Electricity becomes a problem in power regenerative braking and since sparks can be completely prevented, all shinkansen bullet trains and high-speed trains have insulated coating for bearings to the drive motor for wear-resistance, extending lifetime usage and keeping maintenance and replacement costs low.TOCALO’s thermal spray coating for insulated bearings is used for all driving motors of the domestic Shinkansen. Similar application is in bearings for wind power generator."
“It is essential for young people to have flexible thinking ability and action power that is not afraid of failure. We want those who are not satisfied with the current situation and are challenging themselves towards achieving further height! I would like to encourage everyone who join TOCALO or any other company from now to feel pleasure in supporting the customers behind the scenes and contributing to society. Let's create a future of TOCALO together!”
Takahiro Arimoto 有本隆浩 of Matching Service Japan (TSE: 6539)
“Founded in 1990 as a pioneer of online recruitment specialized in administrative department and accounting & legal fields, we have since established our own infrastructure network and have become a mentor of qualified certified public accountants, tax accountants, lawyers. We have been a market leader in the industry specializing in experienced people in the management department of the company (accounting, financial affairs, personnel affairs, general affairs, legal affairs, business planning). In the future, we will establish the online communication platform Manegy that will be useful every day in the relevant areas. Guided by the philosophy of ‘matching people and information’ to create better encounters between companies and people, the Company continues to contribute to society with our online recruitment and communication portal site and our know-how of high precision matching cultivated through specialized type recruitment business.”
“Manegy started with the idea of gathering job seekers. Traditionally, we started to use mass marketing such as the method of advertising to specialized magazines subscribed to by senior professionals and the administrative departments in order to bring widespread recognition of our services to the public. But the acquisition cost per job applicant will rise. I thought of providing services and information that are useful not only at the time of change in jobs but also during their day-to-day operations to the 3.5 million personnel in the mid-career and enterprise management department nationwide, such as Q&As and legislation revision etc. Because senior professional personnel provide the information, the information is more accurate, and they become more visible as experts to potential employers. Employers can conduct their own advertisement by writing information to the site, which can lead to talent acquisition. With daily contact with our services, It is a strategy to gather and collect talented people into a platform. It is possible to use our company's personnel introduction service smoothly at the time of changing jobs, and to effectively increase registrants of the recruitment business. This is the communication platform Manegy. This site brings in the view of the world. For example, the user creates an information flow of evaluating and rating the offices of accountants and lawyers, such as what kind of strength each office has. We believe that the latent network effects can develop into a big business and monetized in various places. When the number of registrants expands to about 1 million people in a few years, it is expected that a huge business opportunity will come by grasping and analyzing data characteristics of individual registrants. In addition, in the long term, Manegy's expertise cultivated in Japan is expected to expand well in major developed countries, leading to the development of human resources business overseas.”
“I think that ‘value determination’ is the essence of management. We will fully utilize the network and if you can make the best possible value within the range that the customer thinks is reasonable, high profitability and high added value can be generated for everyone. It was the family environment when I was a child that fostered the sense of ‘value determination’. I am grateful to my parents for learning the sense of business. By training from a young age, I will instantly know where I can sell at what price. For our company, we recognize ‘change is a business opportunity", so we do not care that the economy is clear or bad. Even if it gets worse, there is always an opportunity.”
“If you aim to be the best, you need to do something different from others. Choosing to do something different from others requires courage and is quite difficult. However, if you persist with your own evolution, you can create a dominant position. Profits as a first-mover pioneer were born rapidly, and we took the overwhelming top position. Anyone can become ‘the best’. For that, it is important to open up our senses, sensitivity and sensibility. People who cannot feel anything do not notice opportunities even if they come. So, if you do not become a person of sensitivity and sensibility, there is no success. If you think too much, you may get scared and your feet will stop. I hope young people also have dreams and hopes, believe in themselves, build an antenna of sensibility and sensitivity all over the world, laugh a lot and cry a lot, and create innovation. You can fail. Failure is experience. If you do not act, you cannot even gain the experience of failure. If you continue to challenge, the opportunity to succeed will increase more and more. Please become a person who dare to dream.”
Natsuki Goto 後藤夏樹 of Japan's SMS (TSE: 2175)
“SMS sets the corporate philosophy of ‘to create value and contribute to society by providing an information infrastructure suitable for an aging’. We create valuable services for many social problems caused by rapid aging and contribute to problem solving. SMS stands in the place of ‘aged society × information’, and I believe that this itself is one of the very few growth areas in future Japan, especially where rapid aging progresses among developed countries, the needs for services and products that have not existed in the past have continued to expand. The information related to the aged society is often highly specialized, such as nursing care and medical care, and the need to easily obtain correct information is growing, and there are enormous business opportunities.”
“From the beginning of our foundation, we are in business with a strong will to make SMS to be a company that will last for 100 years. As long as SMS continues its business as an ‘information infrastructure in an aging society’, we will be necessary for society in the decades to come. The identity and organization knowledge of SMS is necessary to imprint and continue on the business creation method of the SMS flow and connect the 100 years of baton with promising management talent who can absorb this experiential value in a straightforward manner.”
“Our fundamental strategy is to create a thriving community of members in the area of nursing care, medical care, healthcare and elderly with daily use of the services to create and expand businesses. We also place emphasis on creating synergetic effects between our services. For example, members of Care Manager.com, an online community which boasts membership of 56% of the total number of care managers (85k/150k) who answer questions regarding nursing care that are posted in Anshin Kaigo, an online community for families engaged in nursing care. The Q&A site on health, Narukara, enables posting health-related questions or concerns which are answered by such professionals as doctors, nurses, pharmacists, nutritionists and care managers who are members of our community. For the community membership of nurses (610k/1600k) and registered nutritionists (32k/60k), we have 60% share; 13% share for home-visit nursing care operators (15k/121k), 5% share for pharmacists (19k/280k). For the recruiting agent and ad market, we have 30% share for nursing care professionals (580k/1850k), 20% share for PT/OT/ST professionals, 50% share for large-sized nursing care operators, 10% share for clinics (9.5k/100k), 65% share for hospitals (5.4k/8.5k), 40% share for nurses and 20% share for student nurses (15k/75k).”
“I am strongly interested in human resources who are more sensitive to the essence, rather than human resources who have different experiences from others. I think that experiences such as entrepreneurial experience and existence of overseas living or studying are superficial stories. What I ask is what they have learned and how they changed themselves. Regarding entrepreneurship experience, just as investment banks, trading companies and consulting firms gained popularity in the past, we do not feel an appeal to those who are just doing entrepreneurship as a kind of fashion. There are great possibilities for those who clarify their position and purpose in life and keep thinking with their own minds and are moving to something somehow. There is a potential for them to do well wherever they go. I would like to work with these people, and I would like to motivate them to be entrepreneurial managers in projects that become part of the ‘information infrastructure of aging society’ for SMS.”
Shuhei Morofuji 諸藤周平 of Japan's SMS (TSE: 2175)
“The basic strategy is to divide the information infrastructure into ‘daily’ and ‘extraordinary’ and combine them. It is extraordinary services like change job, get married, or buy a car, that users want to pay money for use of the information infrastructure. As the impact on the future life is huge or there is a movement of a large amount of money, we want to obtain the correct information even if we pay money, and the information infrastructure tends to be an easier to business. Therefore, we engage our customers with our daily service and monetize by having them move to dedicated non-routine services when in trouble.”
“I hope for every staff to do rewarding work and to live a life full of personal flourishing, and we have prepared some unique measures. With our ‘New Business Proposal System’, anyone can propose a new business plan and promote it at the ‘Innovation Office’ which specialized in new business development. As long as the business is part of the comprehensive information infrastructure that can contribute to the aging society, the staff who raised the new business proposal can operate the business as the person responsible for the project. There is a ‘profit return system’ that returns approximately 30% of company profits to all employees.”
“As I was exploring business opportunities in the elderly care business, I thought that a online matching company for land information specializing in elderly housing and online recruitment of talent to help them find work given the shortage of human resources. I decided to investigate the business of land information and recruitment business and found out that online recruitment business of human resources is better. The land information is one hundred million yen and the return is also large, the risk is also high, and after one transaction, you have to do other projects. Meanwhile, recruitment has many transactions even though it is low in return per transaction. When we opened for business, the needs were strong, so we were able to get more and more contracts. I started to expand the business in the adjacent areas from the fear of competition by rivals. We started to introduce the care manager in the nursing care industry and started to increase new services every three months. As we expanded our business, there were also companies in the nursing care industry that were funded from venture capital to create a large-scale system rapidly. These companies did not work. Because of its complexity, the market that is initially emerging is too small, and there is no room for large companies to enter while securing profits. Also, such a market will not scale even if trying a system approach, and it cannot penetrate with one product like Uber. Many startups in the world are supposed to grow greatly with one product, and it is like a conventional VC or startup idea when VC invests in such a story. It may be hard to create a business like SMS.”
Atsumi Hasegawa 長谷川敦弥 of Japan's LITALICO (TSE: 6187)
“Since its founding in December 2005, LITALICO has worked on solving social issues. We have a vision of ‘creating a society without obstacles’, centering on the Internet platform of the developmental disability portal site ‘LITALICO Development Navi’ and employment information site ‘LITALICO job navigation’. By building the services, technologies and medical systems that realize the diversity of individual ways of living in society based on the idea that disability is not on the person but on the social side, obstacles can be lost. Leveraging upon the knowledge cultivated in the disability field, we are also provide educational services unique to LITALICO in fields that are becoming increasingly important in the future, such as developing LITALICO Wonder, our ‘IT × Monozukuri’ classroom that provides digital-based educational courses such as programming, and parenting internet media ‘Conobie’ in the general education field. We will continue to develop nationwide store services, mainly LITALICO Works and LITALICO Junior, for the parties in order to respond to the requests from many customers, but in the future we will promote ‘total solution deployment centered on the Internet platform’. We will accelerate the realization of ‘society without obstacles’ as promoting and improving the quality of the industry as a whole.”
“There are diverse people in society. If there are services and technologies that realize the diversity of people's lives on the part of society, obstacles can be lost. The obstacle is not a person but a part of society. The origin of the company name LITALICO is a word coined by combining the Japanese words ‘altruism’ and ‘self-interest’, which means ‘altruistic self-interest’, as you benefit others, it will become my own advantage. Bringing happiness to those involved leads to their own happiness. It is a philosophical brand that expresses our philosophy and values. I think that one of the merits of the Japanese is ‘a heart to consider others’.. to give courage and hope to people all over the world.. to demonstrate courageous leadership in the international community.”
“I worked in the IT company Gaiax (TSE: 3775) for three years after I came to Tokyo. And I thought. IT is amazing. I would like to use this for people who are in trouble, not for games or war, turn society into a good direction. At school, the more we demonstrate creativity, the more I was condemned as a nuisance in breaking the rules, but people who change society are different, and I began to think about creating a social structure and education. While I love the corporate culture and people at Gaiax, I began to realize that I wanted to live a way to hit all my passion for innovation that fundamentally solves social problems. While I was studying education and medical field, I visited LITALICO with my friend's introduction. The encounter with a young woman of about 20 years old with cerebral palsy who was contracted to do data input work from LITALICO changed my life. She communicated with me by hitting the keyboard with her headgear that she looks forward to buying a gift for her family with savings from her wage of about 2,000 yen a month to show her appreciation, and I decided to participate in LITALICO and work to devote my life to create a society without obstacles, in which these people can work on their own will and can be happy even if there are obstacles. Every day I clench my teeth that we will do our best to help people with disabilities to become recognized by society. Business is the way to last. LITALICO showed sustainability as a ‘business’, so that support for persons with disabilities was inaugurated as a business in a niche market. We want to continue to give courage to people who gave up on working and learning.”
“The vision that LITALICO presents in ‘creating a society without obstacles’ was born from my own personal experience. I was born in Tajimi City, Gifu Prefecture. Since I was in a kindergarten, I was not good at the collective life and it was said that ‘I will not listen to the teacher.’ I had ADHD tendency, I could not sit still. In the middle and high school days, I often wondered about the rules of the school and the teachings of the teacher, and I feel bad by speaking or acting to change them. I disliked myself as a person, and I thought it will go wrong if I go out to society. When I was in college for the first time, it is an encounter with the owner and couple at the yakiniku store where I was working as a part-time job that changed my life. I was told that ‘I am doing good’ and I was liked by customers. These affirmed ‘I have action power’. To respond to expectations, I jump in the office building to acquire group customers, distributes flyers for soliciting part-time jobs for the store and distributes them in front of the station. I was actively involved in the management of the store. I was told ‘I may have the power to improve the world.’ ‘Try to go to Tokyo or New York,’ the couple told me."
“By going to LITALICO Junior and LITALICO Wonder, parents themselves also change their values, change their relationships with children, to look at their individuality and interests more carefully without comparing them with other. Even if the classroom is held several times a week, such parent-child change will be worth the lifetime. For the country, if we can firmly invest in the ten years of childhood and realize a rich educational ecosystem, we can increase the number of active people in society in the next 60 years and 70 years and raise the happiness of the people and also reduce the various expenditures of the country.”
".. there is no fixed manual in our teaching materials. It is often asked, ‘Why do you do education without answers?’ From my point of view, it is rather questionable to continue doing ‘education with only one answer’. Those with only one answer can be automated with computers and robots, and what is needed in the future is creativity. Rather than following the answers prepared by adults, it will be useful to develop the ability to think and produce original things themselves in future times. It is important for children's growth process to have a different evaluation axis from the school. Because children who are robot lovers, games lovers, programming lovers are maniacs, they may be a little strange at school, but at LITALICO, they are heroes. It is clearly different from the evaluation axis of a school where only students who can study, can do sports, have high communication skills become popular. Some school students are irritated and cannot concentrate for one minute, but they can focus programming for 3 hours at LITALICO. If you look at diversity, talent blossoms. A student from LITALICO is a girl who won a prize in a certain robot contest, but the chance for her to attend LITALICO was consultation from her mother who says, “She is disassembling a personal computer.’ If you disassemble your computer as a girl, parents usually get angry when seen with the eyes of a strange child. But we are seeing a wide variety of children, so I will answer like this, ‘Well, that is pretty good talent!’ I think that the ability to find your own answer is more important. I want to create a society where many ‘strange people’ who cannot ride well on the traditional success line are active. You can live strongly if you have a theme that can burn your passion even if you cannot adapt it to school.”
Kohei Takashima 高島宏平 of Japan's Oishi ra daichi (TSE: 3182)
“We want to eat delicious and healthy food without hassles. Oisix ra daichi Inc. was established to meet customers' demands for easy access to delicious and healthy food. In June 2000, we at Oisix, launched our business featuring only 20 different types of vegetables. Then we started a search throughout the country for safe, healthy, and delicious food products. Our concept was to only supply ‘products that food producers would be comfortable giving to their own children.’ Since then, we have been delivering food products that are carefully selected in terms of safety, nutritional value, price, and taste to support our customers' daily diets. We now sell more than 4,000 products, including meat, fish, daily food products, prepared dishes, sweets, and alcoholic beverages, as well as fresh fruit and vegetables. It was not easy to persuade farmers to sell their products to us when we first started out, but we now have partnerships with approximately 2,700 top-class producers throughout the country. There are a lot of things our Company cannot or will not do. No matter what the sales potential of a product is, we will not sell any food which the producers of that food would be reluctant to eat themselves, simply to boost our own sales. We do not keep stocks of most of our products simply to guarantee the delivery of fresh fruit and vegetables to our customers. For this reason, we deliver as soon as we receive your order. Our aim for our customers is to deliver food produced by carefully selected food producers from all over the country in optimal condition in terms of taste and safety. We also bring a smile to our customers' dinner tables by helping them enjoy a delicious range of food at home. We are committed to making every effort to help more and more customers enjoy a happier and more varied diet.”
“Supporting a happy eating habit of people is really hard work and I realize that there are more tasks to know along the way. First of all, it is important to convince yourself. if you have something that you care about with your heart dearly, you will do it even if it is 100 times hard. If you do not care about the work with your heart, even if the market potential is very big, you will not do it well. It is very important for me that what we are is being required by society. We feel a sense of mission at will when we do it better for society. A feeling of mission that ‘I have no choice but to do our best’. Thinking about the value that something must be done. From the beginning it is very different from the feeling like ‘Where is my profit?’ Whether it is socially necessary or not is very important. Do you want to climb a mountain or are you having fun of climbing a mountain? Do you want to reach the summit and see the scenery, or do you just want to climb the slope? In the past, the summit was the purpose, the slope was a means, but I came to think that it might be the other way around. Perhaps, it may be the purpose of going up the slope (laugh). We are appreciated every day by our customers and producers, so I think that it is an environment where motivation is easy to maintain for the better or worse. I feel very rewarding about the process of creating a new service and for it to be accepted it in the world. It is paradoxical, but in order to grow, do not think about growth. Growth is a means to win. What we want is people who want to do something nice to the world. Our growth will be to make our dining table at home happier, to realize a rich dietary life in families, and to improve the living standard of farming producers who are working hard. The more obsessed with work, the better you can make the world directly. What we are most proud of is to be able to balance customers' safety with business continuity and growth of producers.”
“Utilization value changes according to how effective use of limited shopping time changes, and we boost the conversion rate to regular home delivery with high repeat rate and loyalty. We do purchasing analysis of good customers to recommend new products to another customer. My set saves you the trouble of finding what you buy every time, making it easier for you to spend your free time in the time to discover new products. A recommendation that analyzes purchasing patterns of good customers and presents recommendations to people with similar tastes also encourages customers to meet new products. If you like the items, you can expect to buy them on the next purchase. Ultimately, the goal is not data analysis, but to make customer experiences and the environment better."
“We gradually earn trust by providing information to farmers and tried to tell the feedback of fans and customers to the farmers. Agriculture is an industry where producers and consumers are very far away. Every farmer thinks the crop I made is the best. It is a mechanism that consumer's voice does not reach. It was very fresh to deliver customer's voice to the farmers. By returning consumers' live voices to producers, the farmers also feel for the first time that the vegetables they are making are required. We hold an event called ‘Farmer of the year’ that honors the most delicious vegetables produced by that ‘charismatic farmer’. We decide not from the viewpoint of management or agricultural technology, but from the evaluation criterion of the consumers’ voice. A winner is decided by annual consumer's voice and consumer's vote on the web. Awarded farmers can sell on special sales page. It is a measure that farmers can regain their pride and also helps in the branding of the farmers. We also hold local product exhibitions on the web. We are helping each prefecture to transmit local products to the whole country on the Internet and to tackle new sales channels. In addition, we are doing activities to discover vegetables that were loved locally but not spread throughout the country.”
“A lot of delicious vegetables are sold only by Oisix. We also have many unique naming in the vegetables that we offer. For instance, we have ‘Peach Kabu’, which is raised quietly in the edge of the field of a producer. It is sweet and tasty enough to surprise you. But there was a big weakness. It was easy for insects to be attracted to its sweetness, and the skin was so soft that it was not suitable for shipping. Still, it became possible to sell by the strong enthusiasm of the staff who wanted to deliver this deliciousness and ingenuity of growers' cultivation to the customer. And it became popular products that were picked up on TV. Even from this one TV episode, you can sense the attitude of Oisix and the quality and commitment of the products being offered. Due to such precise and daily efforts, Oisix has a lot of commitment products that only we offer.”
“The story nature is also an important element of taste, and in our service, we mention the producer who made it, we deliver comments and stories from producers about their feelings and on their vegetables at all times. For example, we will disseminate the information ‘This vegetable has been raised with this kind of hardship by the producers' thought, and as a result, such a taste is born’. If you eat after knowing such interesting information, I will double that impression. We take care of such sympathy and impression very much, but this is also popular among customers, and the repeat rate has risen after incorporating this service. Another example, we will e-mail the producer's voice on the day the item arrives. ‘Since this spinach is sweet, please try eating with salt alone without doing any processing first’. The conversation begins to rise and you can be touched as ‘Oisix is amazing!’ As we eat not only the tongue but also the brain, we thought about how to stimulate the communication of the dining table and raised the repeat rate without cost.”
“Once every half year, all employees experience a bodily sensation. By going to the site of the producer and helping with the work together, we can experience what kind of hardships they gone through, how much passion goes into the product making, and we can then tell it to the customer properly. We think that is our mission.”
Zenshi Takayama 高山善司 of Japan's Zenrin (TSE: 9474)
“Digital maps are now indispensable to our lives. When you open Google Maps and look closely at the bottom right, you will find credit "ZENRIN". Yes, it is our company that provides information to Google Maps. Zenrin offers many of the digital maps used online and on mobile devices, including major portals such as Google and Yahoo!, and directions displayed on car navigation systems. The address system in Japan where the street, address, number, letter at the various municipalities is much more complicated than in the Europe and the United States. Japanese maps are not easy to make”
“ZENRIN started in 1948, right after World War II, providing maps for tourist booklets issued by Beppu City in Oita Prefecture. Since then, ZENRIN has contributed to people’s lives by offering a variety of products and services, including residential maps and map data used in car navigation systems and are active behind the scenes such as in firefighting, policing and disaster prevention, rescue & recovery. Under our unique business model, we conduct regular maintenance on our large volume of information collected every day, manage it in a database, and provide it in forms optimized for all manner of devices. The usage style of our map varies due to technical innovation and external environmental changes such as sophistication of ITS technology, safety drive support and stronger consciousness for disasters. The origin of Zenrin's company name is based on the meaning ‘good neighbor’. This includes the feeling of founder Masatomi Osako that we ‘cannot create a map unless the place is peaceful’. We aim to progress, firmly maintaining our spirit of "Fraternity, Service and Creation" and provide valuable information to our customers applying to their respective needs promptly.”
“We succeeded in developing digital database of residential map in 1980s, which was the dawning era of computers. It contained evolutional display with more than 100 layers such as administrative division, land shapes, roads and facilities. This development expanded the range of usage and improved integration of information and location into contents. In 1990s, ZENRIN developed the world's first GPS car navigation map. This system provided smoother mobility to unknown places by precise guidance to destinations and contributed to realize such society as using more accurate map information. Since then, we constantly contribute to the progress of ITS (intelligent transport solution). Now we provide map information to car navigation systems for various manufacturers as an indispensable item in support of safe driving.”
“The beginning of Zenrin is a small publishing company launched by the founder Masatomi Osako that makes sightseeing information in Beppu, shortly after the war. The book which introduced the origin and effect of hot springs and information on tourist spots was said to have been useful and the number of travelers to Beppu increased. The map became more popular than the book itself and was attached as an appendix. From hot spring inns to communal baths, fine roads are recorded without any exceptions, and the map had built up a big reputation for travelers. Osako is convinced of the possibility of the map and aim to transform into a map making company. Osako believe maps have high public value and reflect the situation where people live and leave the history of the area and he wants to contribute to society by keeping steady surveys and updating maps. At that time, Osako drew curves of the road using drafting tools and it was a skill to put it in such a clean way. When a residential map was born in this way, the demand for ‘I want you to make it in my town’ also rushed, and gradually spread to neighboring municipalities. Osako set the goal ‘I would like to bring convenience to Japan through a residential map to support people’s lives and deliver a useful map across Japan’ and gradually expanded the coverage area. Zenrin's turning point was a construction rush due to high growth. Buildings are built in the city and new towns are built in the suburbs one after the other, the appearance of the town changes rapidly. Zenrin's way of relying on manual labor has made it impossible for map creation to keep up with changing speed.”
“Shinobu Osako, the second generation, addressed this problem by digitizing the map, which no one else was doing in Japan. . At an exhibition, Shinobu saw a prototype of a ‘drawing system’ by computer in which if you enter the necessary numerical values, you can create a design drawing with a computer. Osako said then, ‘If you create a map with this, you can reduce time and effort dramatically’. However, this was in the days when computers are not yet popular and the cost reaches 10 billion yen, which exceeds annual sales. When consulting the Board of Directors, voices of opposition rose all at once. However, Shinobu said, ‘To make Japan more convenient on the map, this is the only thing’ and he pushed against the opposite and decided to introduce map drawing using the computer. After trial and error, in 1984, Zenrin succeeded in digitizing the first residential map in Japan.. Thanks to the digitization of the map realized ahead of the industry as a result of the decision of Shinobu more than 30 years, Zenrin precedes other companies in the field of Internet maps and car navigation systems which is now supporting the backbone of Zenrin and pushing Zenrin to top share.”
“The map of Zenrin is also used to save lives, for example, at the fire center's command center. Detailed map information including name of resident, road width, and building shape, is used for activities to protect the safety of residents, for example, in the case of an accident, from site confirmation to support movement of emergency vehicles. For instance, when Kawasaki Municipal Fire Department Command Center received a fire notification, the fire mark indicating the fire site was displayed on the monitor map. And the mark of ‘P’ represents the pump car on site which are shown in real time on the map. Important insights can be acted upon, such as ‘You can go through here if you're a ladder car’ or ‘I am going to be here because it is small if it is an ambulance’. The location of the fire hydrant was displayed on the map of the fire engine vehicle. Thanks to this, firefighters are able to put out the fire as soon as possible. Zenrin maps are indispensable for life saving.”
"Meteorological disaster prediction support system was created together with Asakura city of Fukuoka prefecture that suffered major damage in the northern Kyushu heavy rain in 2018. For example, if there is a danger of flooding in a river, the map area is red and the predicted flooded area is shown. This is linked with residential maps. Because the house of the person who needs assistance such as the elderly is displayed in red, evacuation can be induced quickly. The situation of rivers flowing through the city with live camera images is displayed in real time, and each water level is also understood. Zenrin is trying to extend this system nationwide in order to lead to a quick rescue operation.”
Keisuke Hikiji 引字圭祐 of Japan's Sharingtech Inc (TSE: 3989)
“I decided to launch the life service matching business, our core business, because I wanted to create a mechanism that connects experts with high-quality skills and experience, who have become idle assets in each company, with people who need them. We handle 120 genres in 7 key categories related to services dedicated to solving common domestic problems in daily lives, ranging from urgent matters (locksmith, pet funeral, glass window repair); reform, construction and repair (water leakage, piano tuning and repair); vermin (termite and pest elimination); housing-related (garden care, replacing tatami mats, electrical leakage repair); submission of lump-sum quotation (purchase of farm equipment, noise insulation work); IT (smartphone repair, PC repair); Others (signboard production, disinfection and odour elimination, taking over discarded cars, introduction of industrial doctors). Our company partners with more than 3,000 service providers and member stores who are mainly handyman firms that can solve a variety of domestic problems, the largest scale in Japan, and its business scale in the life service market continues to expand. We receive an average number of 2,700 inquiries per day. By establishing a system that automatically keeps growing by using an enormous volume of data that is accumulated day after day, our matching technology, the unique feature of our company, has also been evolving at an accelerating pace. We will continue to make great services indispensable to society in the future, and we are pleased to support you. We are supported by many stakeholders to result in our company now. With gratitude in mind that this support is the foundation of corporate sustainability improvement that all our employees take action and practice and fulfill our social responsibility based on our basic philosophy of ‘contributing to society with high quality matching’, we aim to be a company trusted by society through fair business practices.”
“We solve problems that suddenly occur in daily life such as glass replacement, pet funeral, and troubles occurring every year in the fixed season such as termite extermination. Because few users think that they are willing to ignore or leave behind the problem, continuous demand is expected each year. Therefore, regardless of social conditions and changes in the surrounding environment, it is a market area that can generate stable earnings. There are a lot of users who do not know where and whom to contact when something goes wrong. On the other hand, there are countless service providers that solve ‘every day living problems’, including convenience stores. Until now, even if you search by telephone directory, flyer, or WEB search, the search for providers is very inefficient for the user, such as whether it matches the requested service or whether it can cope with the requested time. Many small businesses and individual business owners are busy with day-to-day operations and do not or cannot have a marketing viewpoint or advertising budget for their services or they still rely on the customer attraction method that utilizes the paper-based media in which the effects on sales are uncertain. There are also good local service providers who are not acknowledged, although they have sufficient knowledge and experience. It is our web platform that connects both. With our company becoming a hub, it is possible to efficiently match merchants to users' needs. In addition, our system is designed to match member firms with high conversion rates. As a result, we can efficiently match member firms with user needs. We do not receive registration fees from member firms. Only about 30% of the price is paid as an intermediary fee only when the contract between the client and the affiliated party is established.”
“The current system was to inform the service provider after the online or call inquiry from the user and to contact the service provider again. When this new MOVER system is implemented since Aug 2018, we can grasp real-time the location information and schedule information of the member firms by using GPS information and new technology. You can grasp where each staff of our member firm is, and you can instantly match idle merchants that are located closest to the user, reducing lead time for the fastest response. By further improving matching efficiency, this has the effect of increasing profit by increasing the conversion rate and the user unit price rises greatly. Also, by arranging a nearby member firm store, it is now possible to provide services at a lower price, to dramatically increase affiliated stores that can respond to low-priced services such as replacing light bulbs and assembling furniture, which are in high demand but difficult to actively develop. We believe that demand for low-cost lifestyle services in a society with a declining birthrate and aging population will grow in the future. With MOVER, if there are multiple inquiries and jobs near the place where the provider is working on, it is possible to efficiently match based on these information and the provider can secure sufficient profit. With the operation of MOVER, not only every member firm but also every worker can do work orders, and we stand up as a platform for life services more than ever. We believe that it is our mission to build the only life service infrastructure in Japan that can provide speedy service at a lower price than anywhere. We will continue to develop services that meet the needs of life service markets while expanding service genres. In addition, we believe that there are many large companies developing B2C business that want these life service infrastructures, and only our company has this infrastructure to open up to them in new profit models.”
“STI’s proprietary trading system for matching services with those needing them is also a database of information on member firms and customers. Via the Sharing Place, member firms receive information on inquiries and referrals, and can make a bid for the work. As it is cloud-based, members can access it and obtain inquiry information from anywhere via PC or smartphone. The always-accessible matching service has resulting in the building up of a database in the Sharing Place, including trends in user needs and a track record by region and each member firm’s specialty and characteristics. We analyze order placement rates and other data for each service category, use the analysis results to quantify each firm’s competent service area and realize a high ratio of successful matching that satisfy user needs.”
“Among the member firms that receive the information of the request via the Sharing Place, only the first responder can directly communicate with the prospective customer and submit a price quotation. If the customer accepts the offer and an agreement is reached, the member firm then provides the service and the customer pays the agreed amount to the firm. Subsequently, STI receives a part of the amount as a commission fee (pay-for-success fee) from the firm. From the perspective of the member firms, the work referred from STI allows them to generate sales they otherwise would not have secured, and to make more efficient use of their resources.”
“Through our rich database platform, we accumulate various data and we will match the member firms' businesses in five stages for each service genre. The criteria are past sales performance, unit price of service, order booking rate, conversion rate, area of coverage in detail, customer satisfaction, etc. We analyze actual value such as order booking rate and other data for each service genre, assess each member firm’s competitive service areas based on the analysis result, and realize high matching proposal according to user needs. When the call center receive inquiries, we will send emails to the highest-ranking business operators, we will grant access to the client for the first operator to raise their hands. If the highest-ranked business operator does not return the inquiry after a certain period of time, we will send an email to the next ranking business. If it is a case that requires speed, this takes place every five minutes.“
“Through interaction with member firms, valuable information, such as latest customer trend and user needs, is absorbed and analyzed. We can therefore grasp what kind of needs exist outside our service areas and identify which of member firms can satisfy such needs, based on the registration data of member firms. As such, it is relatively easy for us to define and expand into a new service category and smoothly roll out its matching service.”
“It will not take overnight to gather more than 3,000 merchants nationwide into our platform. The presence of more than 3,000 member firm stores has become one strong entry barrier. By making an alliance with STI, member firms can attract more customers and obtain an opportunity to increase business and to make additional use of their tangible assets, such as equipment, as well as their intangible assets in turning idle time into income-earning time. Because STI doesn’t charge a registration fee or initial fee to firms that enter into an alliance, we are favorably received by many service providers. We have adopted a ranking-based system to give priority to member firms with a higher order booking rate, so that they are the first to be introduced to prospective customers. We give advice to member firms in order to boost their rates and are thus strengthening our Win-Win relationship.
Another barrier to entry is the creation of a virtuous cycle based on the accumulation and use of data. The more matching services used, the more we can accumulate information on users' needs and trends by region, information on affiliated stores, and the matching rate and profitability will improve. We can also directly attract users to the vertical media sites of each genre via the ‘Good Living 110’ platform and search engines such as Google. We also regularly disseminate useful ‘pearls of wisdom’ content for daily life to educate users to have some knowledge of the service details that will help when selecting the right service provider or observing the work performed by the selected service provider, and we are making efforts to enrich our lives.”
“The third barrier to entry is the call center operated by the company. When a call center worker receives a request for the contact information for a member firm, the appropriate-category caller-response questions are displayed on the worker’s computer monitor, which optimizes services and gives us consistent quality. The knowhow to receive telephone inquiries of several genres at one call center has been established. It is not easy to create such a call center. Even if we manage a new genre of vertical media site in the future, the existing call centers can be used. In this case, even if the company's sales increase, the cost will rarely increase, so the marginal profit ratio is considered high. We continue to improve reception talk manuals, service menus, service pricing, etc., so that we can provide services that match user's requirements. In Oct 2017, we invested 10m yen for a 4.76% stake in 6CNS which provides call center development and innovative service utilizing voice-emotion-recognition artificial intelligence (AI). For telemarketing operators, 6CNS utilizes Level 4 technology, Japan’s highest level in the Advanced IT Engineer Examination, has made its newly-developed AI engine learn Japan’s highest call center knowhow, and provides innovative services. The company is also studying themes such as language analysis by using recorded audio data (transcribing spoken words), customers’ voice recognition technology, voice synthesis technology, and dialogue engine technology. We are adopting more AI and targeting improvement in the conversion rate, making it even harder for others to compete with us. We believe that learning the big data accumulated by us will speed up development and lead to a significant cost reduction.
Thanks to the above three success factors, STI has established competitiveness, which is hard for others to replicate. Daily-life service providers in STI’s focused categories tend to be small in scale, have a moderate local-region monopoly, and therefore be competitive in their small service areas. We believe that welcoming these firms to our network of service categories, we should be able to establish a sustainable monopolistic situation in these specific categories and realize high profitability.”
Katsuhisa Kinoshita 木下勝寿 of Japan's Kitanotatsujin Corp (TSE: 2930)
“From the perspective of the Japanese archipelago, Hokkaido is the northernmost island which has the richest natural resources of Japan, but for the Asian continent, it's a central point and known as ‘Asia’s Switzerland’. We want to carry the message that we are a group of Meisters in the North giving functional products to everyone in Japan, Asia and the world. Our E-Commerce business adopts a sales formula specializing in small-lot items. That focus allows us to offer a more enriched follow-up service as expected of a specialty shop, and we can better implement a continuous purchasing structure. This also allows logistics simplification, resulting in direct and indirect cost cutting. As a comprehensive functional health and beauty product sales site, J North Farm supplies customers with 28 functional health and beauty products, including Kaiteki Oligo, focusing on the development and selection of goods that offer help to customers with worries to feel real results that will lead to them becoming repeat customers. We offer a subscription-style buying system for customers who wish to continue purchasing the same goods. Our development rule is simple: ‘We only sell once we've created something that's shockingly good.’ J North Farm's standard is “Feel it yourself.” Health foods and cosmetics are full of ingredients that have ‘theoretically sound results.’ However, in the end we feel that data is data, and prefer to spend enormous amounts of time on experience monitoring tests, asking ‘Can you truly feel it yourself?’ And from those results, we only commercialize what becomes ‘shockingly good.’”
“There is a very good brand image in ‘Hokkaido’ as Meister in the North. However, if you want to make a convincing product, it will obviously start with careful selection of raw materials. We search and use raw materials suitable for each product from all over the world. Since Hokkaido has many very excellent materials, we frequently use them in our production, but I will not use that ingredient merely because it is from Hokkaido using the Hokkaido image. As mentioned earlier, we always compare with other ingredients, and we only use it if the ingredient is superior to other similar ingredients. If you are obsessed with local products and overlooking the product quality, you will be toppled over. If we are releasing products that are merely dependent on images, that will lead to a decline in the brand equity of Hokkaido. That's why we are developing products that solved the problems of our customers, not just product development that relied on the image of Hokkaido.”
“There are still a lot of troubles in the world. Based on this experience, we began to think that it is our mission to develop and deliver products that solve it. After that, we also developed and launched ‘real products that cannot be imitated by anyone’ afterwards. The business which started only by one person can now proceed with a lot of friends. We also created newsletters and communication tools to deepen communication with customers. We offered customer support by a health care manager to satisfy customers and established a customer management system to appropriately follow up with customers. We began to work with all the staff's full power towards the satisfaction of customers.”
“Our product development is free from ‘fashion’. In the health food and cosmetics industry, products that sell new ingredients one after another, such as ‘new ingredients discovered by scholars!’ And ‘apply technology developed by NASA! are on sale one after another. Because new ingredients are easy to sell. And, although it will become a boom in an instant, consumers will transfer to new ingredients that appear one after another. Under such circumstances, ‘good ingredients’ have no time to permeate the consumers enough, and they will disappear as ‘new ingredients products’. Although it is a very good ingredient, it takes time to feel the effect, so there are many ingredients that have become obsolete due to the appearance of the next fashionable ingredient. In other words, good ingredients that are really effective are also buried in the darkness. And new ingredients that we do not know whether they are really good are sold today as well. We are looking for ‘really good ingredients’ rather than ‘new ingredients’. It is never state-of-the-art, it may be an old-fashioned ingredient. We also receive suggestions from raw material makers who have been indebted to us from now on. We do not care whether it is new or not, we will only make products because the level of experience get better for our customers if we incorporate them. That's why we are adopting new technologies and ingredients to improve quality. What we are making is not ‘trendy products’ but ‘practical products’ that can be used over and over with satisfaction and quality.”
“In order to clarify the existence significance of ‘What is our company for?’, we have formulated the management philosophy of our company which has been ‘Meister in the North’ in which we continue to make new fascinating and shockingly good products that cannot be imitated by anyone for the world one after another. Not by blindly depending on Hokkaido's good image, but bringing in marketing concepts like: ‘What do the customers desire?’ and ‘Are customers really satisfied?’ and putting them into numbers. Then I started utilizing Hokkaido's natural resources, and built a business model based on investigating complete customer satisfaction. In May 2012, since 12 years have passed when we were founded by one person, we were listed on the local Sapporo Stock Exchange, and we were promoted to first section of the Tokyo Stock Exchange in November 2015. I felt possibilities for the wonderful resources that are falling asleep in Hokkaido. If I multiply this with marketing I think that I can create a global brand company that is representative of Japan and the world is proud of.”
“Since our establishment, we have continued to grow steadily with confidence. However, it is not a coincidence, but based on two concrete strategies to build a stable structure that keeps growing. Strategy 1 is to dare to avoid trendy fashionable product group. The field of health foods and cosmetics has always been characterized by the ‘boom’ of new ingredients. Products raised on the boom may experience a rise in sales. However, we develop and sell products of genres that do not relate to the ‘boom’ genre. What I found out is that boom sales are transient. Therefore, in order to aim for continuous and stable growth in our current health foods and cosmetics, we dare to develop products focusing on the direction of ‘genre not related to boom’. Therefore, sales of our products are not influenced by ‘boom’, but consist of sales from fans who truly acknowledged the quality of the products, so sales will not rise sharply and will gradually expand our fan base to keep growing steadily. Strategy 2 is that over 70% of our sales is on regular subscription. Our products are consumed continuously, so many of our users will subscribe to repeat the purchases, accumulating sales every month to enable our company to continue to grow steadily. With these two strategies, our company has become a structure that keeps growing steadily.”
“Our company is characterized by high profitability compared to general companies. Of course, this does not mean we are using cheap commodity ingredients or omit customer service. As we do not compromise on product quality at all, the cost of goods is relatively high compared with those of the same industry, and for customer service, we have a policy of prioritizing customer satisfaction with respect to profitability. In other words, in product quality and customer satisfaction, we do not control or reduce necessary costs at all. So, I will tell you why the rate of return is high. We have already said that we started with the sale of Hokkaido special products such as crabs and melons at our founding. Because it was a very competitive market, price battle became fiercer each time round, and it was going in the direction such as ‘we will promote more sales promotion activities to sell to more people’ and ‘prepare more kinds of products to meet the needs of more people’, in an effort to have a superior advantage over other companies. However, advertising expenses and personnel expenses (due to an increase in workload) are increasing year after year, and they have fallen into a vicious circle that profits will not come out even if sales are up and we are busy. As long as it does not yield profits, we are still wondering whether customer's satisfaction has been rising in proportion to the increasing workload every year and the cost increasing year by year? I knew that the answer was NO. Because the amount of work that increases year by year and the cost that increases year by year are not for customers but for sales to rise over rival companies. We felt that there is no durability in the company doing this way. We made a certain decision in a big turning point. I decided to abandon the idea of selling to more people and raise more sales in price and promotion battle over others. I decided to steer a direction to spend the extra cost and power all on raising customer satisfaction.
Specifically, we did the following things. The conventional approach is such that in order to have more people buy the products, we advertise to many people. Our current business model: Raising sales means that the amount of work will increase accordingly. However, we want to turn all of that work volume to ‘people who really need our products.’ We focused on more accurate target segments, Internet advertisements that can analyze customers, and sell them to only those who really need our products. The conventional approach is that in order to have more people buy the products, we sell many kinds of goods to meet many needs. Our current business model: We will sell only a small number of items, within the scope we can follow customer responsibly. By doing this, we reduced the backend load such as product development, production line management, order receipt and logistics, so that more manpower is available for customer satisfaction. I abandoned that ‘we will raise more sales’ and changed the direction towards a management policy of satisfying customers in front of our eyes. As a result of this change, these happened: Sales promotion costs have decreased dramatically for each order; Personnel expenses for each order has drastically decreased; by stopping to sell to many people and instead selling only to the people who need it, management became very efficient and wasteful costs drastically decreased. Meanwhile, as we aimed the cost and power towards customer satisfaction, sales have risen sharply as repeat rate has improved, reviews expanded, and new customers increased. In this way, a positive spiral that ‘sales will rise by saving wasteful costs and trouble’ began to occur. Therefore, as a result of thorough customer satisfaction, the company became a high profitable corporate constitution that wasteful costs are not involved in the selling and administrative expenses.
I understand later that the European luxury brand that lasts more than 100 years like Louis Vuitton is also operating in the same way of thinking. ‘By selling only to people who really need it’ rather than selling it to many people. By focusing on customer satisfaction with the person who bought me for the rest of my life, thereby operating with a policy of high profitability. We are building a permanent company. Although we do not deal with luxury goods, we are feeling something very close with our management policy and we are deepening our confidence that it can be a permanent company. With the faith and belief that ‘thorough customer satisfaction is the secret of high profitability’, we will continue to strive to improve profitability by pursuing customer satisfaction. We hope that investors will be able to understand our company's basic strategy and watch over our stable growth business.”
Takafumi Kusano 草野隆史 of Japan's BrainPad Inc (TSE: 3655)
“The mission ‘To create a sustainable future through the promotion of data utilization’ is the reason for the existence of our company since our founding 14 years ago in 2004. However, there was not even the word ‘big data’ during our founding period and this mission was hard to convey to people outside the company. BrainPad has since grown into a leading company in data analysis with the understanding and support of client companies and partner companies. Our company is a rare Big Data Company in the world that combines analytical skills and software engineering capabilities to transform data to value and to deliver our unique solutions by combining these two powers to support business creation and management improvement. We command the No. 1 market share in DMP (data management platform) centering on our internally-developed Rtoaster, a digital marketing service that supports corporate marketing activities through the provision of advanced and practical marketing solutions. We believe that we will undertake a number of changes with companies that are actively working on utilizing data and that we want to make more use of BrainPad’s power throughout Japan.”
“BrainPad has supported practical AI application of the process of processing aerial images taken by drones using deep learning to provide services to Sony’s Aerosense Corporation such as checking abnormalities and manage asset. For instance, in judging exactly how many cars are in the aerial photographs using machine learning, it became possible to provide automatic management of facilities and materials whether they have been stolen or lost with high accuracy and low cost.”
“In July 2018, we launched our new proprietary matching engine Conomi that converts ‘sleeping data’ in companies into value. Conomi utilizes the collected and accumulated data and uses a unique algorithm to match humans and objects and generate unique recommendations based on the customer preferences to improve customer experiences. Conomi can also be used for offline customer service such as display suggested products to the terminal used at the store or printing recommended products on the receipt.”
Can artificial intelligence (AI) help keep baby food safe? When Kewpie (TSE: 2809), Japan’s largest mayonnaise and salad dressing company with advanced modern factory system, asked Google how they can utilize AI to improve their existing human inspection of raw materials such as culling defective diced potatoes in baby food as the conveyor belt is shuttling potatoes at high speed, Google recommended BrainPad as their development partner. Diced potatoes used in baby food is an ingredient that comes under most scrutiny in terms of safety since quality can greatly vary across batches of production and packaging. Takeshi Ogino, deputy director of next generation technology at Kewpie, commented, “The strictest examination is made of baby food. Even though it is harmless, if mildly discoloured materials are mixed, the mother will feel uneasy. We are doing visual inspection with a quarter of our factory staff. Visual inspection for 8 hours is really tough job. Of course, we tried to introduce an automatic inspection system which is not AI but defects are not recognized. There is something called a color sorting device, but it is very expensive. BrainPad utilized Google’s open-source TensorFlow deep-learning library platform and trained the machine learning algorithms to recognize good ingredients by feeding it 18,000 photos and set it to work looking for visual 'anomalies' that hint at sub-par potatoes. The result was an inspection system with "near-perfect" accuracy. Kewpie currently handles more than 400 food ingredients, and wants to expand the AI system towards similar detection with eggs, grains etc. Kewpie’s Ogino said, “In the future, this inexpensive high performance AI inspection technology will be Japan's core competence in food safety and security.”
Another AI application developed by BrainPad is in the detection of deterioration in the revetment concrete for rivers by image recognition. This is important because social infrastructure such as roads, bridges, sewerage systems, and revetment concrete for rivers, which were developed during the period of high economic growth in the 1960s, have seen aged deterioration, and inspection and refurbishment thereof become an urgent issue. There are as many as 35,462 rivers in Japan with concrete wall which play an important role as a disaster countermeasure such as floods. Yachiyo Engineering, one of the leading comprehensive construction consultancy companies in Japan, is engaged in investigation and examination work related to the maintenance and management of these revetment concrete and the AI inspection has demonstrated its accuracy and usefulness comparable to the costly manual skilled inspection.
BrainPad’s proprietary natural language processing engine Mynd analyzes text based on AI and machine learning to deliver recommended personalized news and content from learning user’s actions to Apple Watch and Android Wear. Some of the internet media customers using Mynd to deliver personalized content to users include Rakuten Q&A, Golf Digest Online (TSE: 3319), Nikkei Style, Diamond Online, etc.
Parcel delivery giant Yamato Transport (Ta-Q-Bin) operates a B2B membership portal that is used by over 930,000 corporations and individual business owners in 15 different industries and service use situations. Prior to using BrainPad’s Rtoaster, Yamato Transport faced the challenge of extracting the right customer segment who have a high probability to use its paid option of 35 online business tools and services. Since utilizing Rtoaster’s big data analytics platform to make “for you” personalized recommendations, the number of customers using the paid online services jumped 6-fold as opposed to using banner ads previously. For instance, Yamato Transport has a service that collects and handles confidential documents and not only did customer usage from the expected industries ranging from hospitals, legal firms to schools increase, but they also expanded to an unanticipated new group of customers in different industries.
Japan Airlines (JAL) has used BrainPad’s Rtoaster DMP for more than 10 years to increase sales of its online travel booking site which sold 70% of its domestic tickets to over 30 million members. For instance, over 1,000 predictive recommendations are developed from the big data analytics engine to conduct successful promotions from premium economy class tickets for international flights to limited time-based products that increased sales significantly as opposed to “blind promotion using banner ads”.
Similarly, Hakuba Valley, Japan’s largest snow resort, has introduced BrainPad’s Rtoaster to enhance personalized communication to customers and succeeded in significantly increasing the number of visitors to its ski resorts. Customers who have purchased a train ticket from Kyushu Railway’s website arriving at a specific station by receive personalized e-gift that can be redeemed at the retail stores near the station.
Financial institutions such as Mizuho Securities also engaged BrainPad to utilize machine learning and predictive analysis system to analyze the data of 1.68m customers such as their transaction trades, transaction styles to predict their interests and recommended products and trades in line with the customers’ life stage and asset status.
German giant Bosch Security and BrainPad collaborated to launch a CRM hospitality support system solution utilizing the images of Bosch’s security camera for mall operators and retail store owners to grasp information beyond in-store POS data and membership information and integrate them with the big data analysis of customer information captured such as stores stopped by, products purchased, visit frequency, etc to deliver more effective concrete marketing measures.
“I am grateful that my entrepreneurship turned out to be good. When we were listed, an employee said at the celebration, ‘It was Mr. Kusano, thanks to BrainPad, I was able to work in the job of data analysis.’ When I heard this message, tears appeared unexpectedly. I was able to make new work and create new value in the world. I was able to contribute to someone's life with that. Of course I was pleased that it was listed, but I am happy that this contribution to someone’s life and creation of new value is more memorable.”
“I am thinking that choosing to be an ‘entrepreneur’ and choosing a profession is not the same. If you think of starting an business because you came up with an efficient business idea, you will not be able to step beyond your strength when you encounter difficulties. I think the sense of purpose is important for entrepreneurship. There is a purpose that I want to do from the bottom of my heart and I work because of that and I think that I can work hard even when it is difficult. In the case of BrainPad, the purpose and mission is to analyze data in this country. If there is such a purpose and it will come true as a means of entrepreneurship, you should take on the challenge. I think that the way will surely open up if you think out and tackle the purpose.”
Dr. Park Sang-il 박상일 of Korea's Park Systems Corp (KOSDAQ: 140860)
“Increasingly, AFM (atomic force microscopy) is being selected for nanotechnology research over other metrology techniques due to its non-destructive measurement and sub-nanometer accuracy. Park Systems' cutting-edge AFM nanoscopic tools features reliable and repeatable high-resolution imaging of nanoscale cell structures in any environment without damage to the sample. At present, the world market size of atomic microscope is about one-tenth of the market of electron microscope. If the electron microscope market is about 4 trillion won, the atomic microscope is only 400 billion won. But this is one of the fastest growing markets. In particular, the industrial atomic microscope market is just growing rapidly. Park Systems is growing at a rapid rate of 20 to 30% every year by securing original technologies in the growth market and solving high-value problems. We are proud to be the only company that has achieved the estimated net profit for investors among the 44 listed companies on the list of technology growth companies since 2005. The atomic microscope manufacturing technology was selected as one of the 47 national core technologies by the Ministry of Commerce, Industry and Energy in Korea. We will grow to become a leading company in cutting-edge nano-instrumentation that realizes quantum jump based on differentiated technology competitiveness and product lineup.”
“Our actual product lineup also evolves from research equipment that looks at the early atoms to core instrumentation equipment for advanced industrial applications. As electronic components such as hard disk drives (HDDs) and semiconductors become smaller and more integrated, the need for measurement at the nano level is also increasing. Our Park NX-Wafer is the only wafer fabrication AFM with automatic defect review. This gives it the power to increase the throughput of your lab by up to 1000% while ensuring a high level of accuracy and quality control when scanning wafers up to 300 mm in size. In addition to nanotechnology, we are also working to develop bio-products to meet the future bio-industry and expand the entire AFM market. Now, we are aiming to build a brand name so that 'Korea' can come to mind first when we are under an atomic microscope.”
“In an industry dominated by complicated and poorly designed user interfaces, Park Systems prides itself on creating systems that are both powerful and surprisingly easy to use. Our innovative, groundbreaking Park SmartScan OS software produces high quality nanoscale imaging in auto mode in five times the normal speed with a single click. SmartScan was designed to be highly effective by automating many of the processes that researchers and engineers perform every day. This can drastically improve efficiency in lab and industrial settings and allow more senior technicians to offload some of their work to less experienced users. Existing equipment was heavily dependent on the engineer's expertise, such as the engineer manually entering the coordinate values of the sample. However, we have made the equipment universal by automating software. It made it easier for more people to use the equipment, even for beginners or less seasoned users to obtain quality data as good as an expert's, without the day-and-night ordeal of using trial and error to acquire experience. Park SmartScan automates and guides the user through every step of the imaging process. All the user needs to do is place the sample on the stage, choose the area of interest, and specify the scan size desired. The rest is done by the software at a click of a button. The system will automatically do the frequency sweep for the cantilever, move the Z stage to the sample, and auto-focus on the sample allowing the user to see and navigate the area of interest for imaging. It will also adjust all the necessary parameters for optimum settings, engage the cantilever, and start scanning the sample. The scan will continue with no additional input from the user until the image is acquired and completed.”
“I graduated from Seoul National University and received my Ph.D. from Stanford University in 1987. I studied under the emeritus Professor Calvin Quate who, together with Nobel Prize in Physics 1986 winner Professor Gerd Binnig and Professor Christoph Gerber, developed the Atomic Force Microscope which opened the way to see the ultrafine world. The atom was so small that it broke the scientific legacy of using any tool. Binnig, Quate and Gerber were rewarded with the Kavli-Prize in 2016 for developing the Atomic Force Microscope. My Stanford dissertation thesis was 'Surface Microscopy for Surface Physics’. STM and AFM (atomic force microscopy) can be called 'cousins'. If the developed STM is a microscope that finds out the structure of the sample through the phenomenon that the electrons are tunneled after the electrons are fired on the surface of the object with the probe, the AFM can detect the interaction force between the probe and the object. This is the principle used for measurement. We can see atoms of 0.1 nanometer (1 nanometer is one billionth of a meter).”
“If you studied the latest theory of a field that received a Nobel Prize in Physics under a global professor, it seems like you should go the professor's path in the US or in Korea, but I chose entrepreneurship because I thought that the technology I studied could be a useful tool for science as well as industry. The Stanford university atmosphere then was also in the midst of the Silicon Valley startup boom. I was also informed that I should be a professor of physics at my alma mater, Seoul National University. When I refused to be a professor at Seoul National University and decided to set up a company, my Korean acquaintances tormented me to change my mind immediately, saying, ‘I do not know the world.’ Of course, I was confident that if I did not do well, I could go back to work as a professor. I have to challenge what I can do. I decided to change my paradigm of the microscope market instead of choosing a passive life in order not to fail."
“Xerox, NTT, and other business associates visited the Stanford university lab and asked us to make prototype products after viewing the prototypes of AFMs. Confirmed that there was demand, in 1988, a year later, at the age of 30, I set up Park Scientific Instruments (PSIA), a AFM maker, in a garage in Palo Alto near Stanford University for $40,000. My first client was Max Planck, a leading research institute in Germany, in 1989. They heard that Professor Quate's disciple was making AFM. At that time, scientists were awaiting the commercial release of the AFM. Max Planck asked me to deliver the microscope within six months. So I exported the world’s first commercial AFM for $100,000 in Dec 1989. And the atom is visible. In 1590, Zacharias Janssen invented the first optical microscope, followed by the second-generation invention of the electron microscope by physicist Ernst Ruska and electrical engineer Max Knoll in 1931.”
“The atomic force microscopy is considered the third generation microscope which breaks the myth that atoms are too small to be seen with any good microscope and is the essential tool in the nanotechnology era. Unlike an electron microscope, which can only see solid samples in an expensive vacuum state, the AFM is an indispensable measuring instrument in the nano and bio fields because not only can it know the shape of a liquid sample such as blood in the air, but also the physical properties such as pressure, magnetism, electricity, and thermal properties. Electron microscopy requires elaborate and complex sample preparation, but atomic microscopy does not require much sample preparation.
“True mental satisfaction does not come from material abundance. Let's say you have a lot of money and power. But everyone around you hates you. Because you live in the wrong way. If you live a life that is not self-righteous, you will not be recognized by people around you. On the contrary, even if you do not have a lot of social status, you do not compromise with injustice and do your jobs faithfully. Everyone around you will like you. You will receive respect. He is truly a happy person. Of course, such a person is a person who makes a right choice for himself."
Shigenori Kanazawa 金澤茂則 and Hachiro Endo 遠藤八郎 of Japan's Logizard (TSE: 4391)
“With the spread of e-commerce (EC), rationalization and efficiency improvement of logistics and inventory management through technology are accelerating. We aim to contribute to the development of the society that converts to EC by accumulating and utilizing inventory information that remains more and more in the cloud. Since 2001, we have provided an inventory management system centered on WMS (warehouse management system) as a cloud service with logistics inventory as the business domain, realizing IT at low cost. As a result, we promoted the IT conversion of small and medium-sized retailers and 3PL industry that are concerned about inventory management, and have earned great trust from the industry. Since launching the service, we have consistently positioned it as ‘customer support for business’ and have grown through committing to the success of the customer's business under the spirit of ‘absolute shipment’. We have been helping the inventory logistics management of automated warehouses and transportation and delivery of more than 1,000 clients. In the meantime, as ECs have developed dramatically by the spread of the Internet, efficient shipping work and accurate inventory information in the supply chain and logistics industry are recognized by businesses as important and indispensable.”
“We are in an unprecedented era in ecommerce. Rakuten Ichiba, Japan’s largest B2B2C ecommerce operator, currently has more than 40,000 online stores, a huge jump from around 100 stores during the time we first started. We have accumulated know-how by working on WMS fitted to EC logistics as an IT infrastructure that supports rapid and accurate shipping dispatch, which is the lifeline of the ecommerce business model. We take pride that our knowledge on EC logistics is definitely top class. Logizard ZERO WMS supports a series of tasks related to customer logistics, from warehouse arrival to shipment and inventory management. Clients can manage the barcode of items at the wireless portable terminal and check inventory, shipping and shipping status in real time. Our POS Pita RBM cloud inventory management system is a service that can perform inventory data update work such as sales and arrival registration with smartphone or tablet. It is also characterized by being able to cooperate with SOFTBANK's cloud POS. In addition, our omnichannel cloud tool, ‘Logizard OCE’, centrally manages stocks through data linkage between multiple online to offline sales channels to prevent excessive inventory and missed sales due to inventory shortage.”
“The origin of our company name Logizard is Logistics + Wizard. When you need to work with complicated programs, you can easily learn and proceed with the settings interactively by following the choices and messages displayed by the computer’s ‘wizard’. We have a desire to expand the image of logistics systems as a high-priced and difficult system that only major companies can introduce, and broaden the scope of being easy and affordable to use even for small and medium-sized enterprises. With our company name, we are expressing the desire to contribute to industry and society by making logistics innovative and efficient like magic.”
“With the strength of cloud software-as-a-service which is low-cost and maintenance-free and the knowledge accumulated for more than 10 years, we achieved our 11th consecutive year of sales revenue growth. Sales in the fiscal year ended June 2018 increased by 25.4% compared with the previous fiscal year and operating profit increased by 64.1%. In addition to steadily increasing sales of cloud services and new client account, demand is also expanding in development and introduction services such as custom specifications. EC is expected to expand to become a 20 trillion yen market in Japan by 2020. New EC companies also increased sharply and Logizard is expanding in earnest to meet the growing needs for WMS. We have platforms and data that have supported Japan's EC logistics for more than 10 years and it is no exaggeration to say that our WMS has supported economic activities that affect Japan's GDP. I believe that management resources have the potential to lead to new business such as big data area in the future.”
“The strengths of Logizard are three points: fast delivery, low price, high service. From around 2004, small and medium-sized EC operators who opened stores at Rakuten began to increase. Because EC businesses suddenly increase in quantity, there is a need to immediately use the inventory control system according to the growth speed. The ratio of logistics expenses to sales is about 11% on average, which is higher than other industries, and EC operators want to keep the distribution cost down. There were two notable needs in the EC industry. One is a sense of speed. The value of Logizard was automatically raised because our WMS enabled EC operators to grow fast without inventory and logistics problems. For example when media talks about the health food of the EC operator, it may be necessary to ship ten times the usual volume the next day. Another is that the 3PL industry that undertakes these logistics has a need to get started right away and wants a IT mechanism to stop immediately as soon as contracted delivery is no longer needed. The IT system in which tens of millions had been invested becomes unnecessary if the contract expires, and what about the remaining charge? Mail misdelivery is fatal when it comes to undertaking online mail order sales. Many logistics companies do not have a warehouse management system, and introduction of WMS was mandatory for entering into the EC operators’ business. Logizard’s cloud service can be introduced quickly and investment risk is small. I also worked at Rakuten Ichiba during its early days and have a good knowledge on the flow of EC logistics that is not found in other companies' products which has also become a strength of our company.”
“We are promoting R&D on our own with respect to three new technologies. One is a management system using RFID electronic tag. If it is put to practical use, you can manage incoming and outgoing inventory with significantly fewer personnel without using a barcode scanner. The second is the introduction of RPA (robotic processing automation of operation task) in logistics and inventory management. The third is to introduce robotics technology into shipping work in facilities such as warehouses and to achieve dramatic efficiency. In addition, we are also developing an omni-channel function utilizing real-time location-specific inventory information. We will be collecting data in the cloud from the operational situation of the robotics technology used in the warehouse and the know-how accumulates accordingly. Data is collected and analyzed, and the AI learns the data with the information algorithm from the feedback loop, making it harder for any other competing systems to catch up with us. We will proactively turn our upfront investment into profits.”
“Our logistics software system has the characteristics that it is difficult to change so easily once you start using it. Since WMS manages all delivery destinations and suppliers, it is a considerable challenge to switch to another system. Even if trivial things are wrong, it becomes a claim. Therefore, our company's responsibility is serious. We cannot betray our customers’ trust. Our products can be launched in ASP at a low cost. We can lower the psychological hurdles and contribute directly to improving productivity of our customers’ business. Logizard aims to contribute to the improvement of the social status of the logistics industry by making it possible for many people involved in logistics to be able to work happily and to do a good job by reducing their troubles. We will not forget to serve customers and society with a high-performance low-cost service.”
Yoji Sugata 菅田洋司 of Japan's Azoom Co. (TSE: 3496)
“Our job is to connect the parking lot owned by the real estate owner with the user who wants to use it. The parking lot business is a very niche, but the scale of the market is large, and information asymmetry has not yet been resolved. So, we operate a site called Carparking.jp and develop and operate the largest portal site in the parking lot category to enable the search for the best conditioned parking lot easily on the Internet and smartphone. Because we believe that stable business is impossible with general intermediation or search introduction with ‘flow’ revenue fee, monthly subleasing business with recurring monthly ‘stock’ revenue is carried out in parallel to strengthen the foundation of the company. Unusual sense of stability is our strength and it is also an element that will lead to future business development. Expansion of the business model in parking lot attached to office buildings, condominiums and private home is expected to eliminate the chronic parking lot shortage in urban areas.”
“Since the information on parking lot does not circulate well, unlike information on real estate which can be searched for in real estate web portals, a management system for information gathering on the specifications of the parking lot is necessary. Specifications are necessary since there are restrictions on the characteristics of parking lot such as total length, full width, total height, minimum ground clearance, vehicle total weight etc. Because the rent for parking lot is cheaper than housing rent, and the owner and the real estate company also need to pay for the publication fee on the real estate website database, there is little motivation to post the parking lot information on the portal site. In addition, fees are also charged for inquiries even if the vehicles do not fit in the parking lot.”
“Real estate is a product that generates value only when someone uses it. If there are users. there will be a higher value than other goods. In Japan’s declining population society, idle and under-utilized real estate will continue to increase in the future. We provide the real estate solution not only to match the needs of both the owners and the users on the website, but also to support each other to get in touch and find out about each other to resolve practical and social concerns. In addition to reviewing the applicant’s information such as their home and workplace address, we conduct screening using external systems and vehicle inspection. We send a list of parking user information once a month to report to the owner (when there is no change in the user, there is no sending) that the parking lot is operating properly. Our information disclosure rate is 100% as compared to around 40% for our peers. Depending on the shape and size of the premises, parking facilities providers may not be able to operate vacant small-scale parking lots due to the problem of profitability, which is one factor of the shortage of parking lots in central Tokyo. Because of inquiries from a wide range of users and our low cost of attracting customers, it is possible for us to secure profitability in a wide range and small-scale vacant plots. We analyze the individual situation of the idle real estate owned by the owner, analyze the market, and we propose a method of maximizing profit by utilizing the know-how of ‘real estate × IT’ which is our strength.”
The parking lot industry is divided into monthly parking lot and hourly parking lot, and our service is specialized in monthly parking lot. Azoom’s model is to share the risks associated with the management of real estate with the owner and to maximize real estate revenue while sweating together. The parking lot owner is relieved from complicated and troublesome work procedures such as the time-consuming user recruitment work, contract work, contract cancellation, delinquency reminders, troubleshooting, tax payment etc which are handled by Azoom. Our monthly parking lot subleasing services are attractive to owners because guaranteed rent setting is possible which has a strong appeal of profitability to owners. Owners are able to see the peripheral rent rate of their target area to make an accurate assessment after grasping the market price. After starting the sublease, there were no cases where we terminated the contract halfway or changed the condition from our company side due to shortage of users or underutilization because we operate the largest parking lot search site in Japan with an overwhelming number of inquiries which is overwhelmingly attracting customers to achieve high utilization and occupancy rate which enables us to secure profitability even for small-scale vacant lots. As a result, we are able to earn high trust from the owners.”
“As a parking lot sharing economy, there is an increasing number of business operators who operate mainly time-lending parking lot, but there are many cases where it is hardly linked to profitability. The main feature of our current main parking lot business is that it is a stable ‘stock type’ business in which sales and profits are accumulated every month. Importantly, since specific users are decided in using the monthly parking lot, unlike the unspecified number of users in time-lending parking which also result in a fluctuating and uncertain income, it is safe for the owner while generating stable income.”
“If you are looking for a monthly parking lot without using the internet website, It was common to have a trader introduce it or you may wish to seek out recruitment signs on the physical parking lot site, and make inquiries by telephone. By using carparking.jp, the monthly parking lot applicant can save this trouble. Also for the parking owner, publication on the website is free, and there are no obstacles to providing information. The biggest resource is the attractiveness of the database of idle parking lot real estate nationwide acquired through the operation of the country's largest platform CarParking.jp. For business owners who operate the real estate business, we believe that our database will be a great weapon in expanding real estate profit and expanding that opportunity. Posting is free. It is a perfect performance remuneration type service in which we will receive a referral or introduction fee (one month’s rent) only when the contract is reached.”
“In addition, based on the needs and knowledge of the parking lot, we have accumulated a lot of know-how in ‘usable IT’ to make business processes in transaction, operation and valuation of the parking lot more efficient and perform highly accurate analysis by utilizing the information of the monthly parking lot. It can be used not only to search for and analyze the latest information but also for future predictions in demand trend analysis because it is possible to catch the trend of data and value every year. In order to grasp the user needs of the monthly parking lots and changes in supply and demand, we visually indicated the vacant space and rent of the parking lot which are real-time data and we also created a ‘parking lot heat map’ which visually displays the inquiries (demand) to the parking lot search site and the number of the parking lots (supply). We also have a mechanism that allows you to calculate appropriate rents and estimate P&L (profit & loss) for each property in subleases with a single button, which speeds up decision-making and reduces management costs, and a mechanism that instantly shares availability information when cancellation occurs to prevent the loss of business opportunities. The rent setting is based on the peripheral rent market which is more likely to appeal to the parking lot owner who places emphasis on profitability. Through these efforts which we incorporate into our daily work, we respond quickly to inquiries.”
“Our business model exhibits network effect such that the expansion in the number of postings on our databases of the nationwide monthly parking lot search portal site leads to an increase in the number of parking lot introductions and further increase in the number of outsourced parking sublease services. We are able to build a virtuous cycle of increase in inquiries leading to increase in number of introductions, further Increasing our subleases due to the increase in real estate data.”
Azoom (TSE: 3496) is Japan’s #1 monthly parking lot search & asset management platform under the website Carparking.jp (https://carparking.jp) in terms of sales, number of search inquiries and number of parking lot postings that are at least 60% larger than its next biggest competitor in a still fragmented but large addressable market where information asymmetry has not yet been resolved. Azoom focuses on the monthly parking lot segment, entering into a long-term master lease agreement with the owner under a fixed rental guarantee and becomes the asset manager in subleasing to longer-term users to generate stable recurring monthly subscription-like revenue with over 90% occupancy rate. By purposefully avoiding the competitive time-based hourly parking lot segment occupied by companies such as Park24 (TSE: 4666) and startup Akippa, Azoom solves the social concern of the specific target group of owners who want to monetize their idle real estate to earn additional stable rental income instead of fluctuating time/hourly-based fee but do not want unspecified strangers using the parking lot since monthly users are verified, reviewed and screened using external systems to “avoid contracts with anti-social forces”.
The parking lot industry’s structural supply-demand gap with chronic parking lot shortage in urban areas and fragmented nature has benefitted Azoom whose online platform received over 134,000 search inquiries annually (cumulative total of over 350,000) vs around 50,000 postings and an asset management base of over 8,000 subleased monthly parking lots. As the number of postings increased, the number of inquiries from users who wish to use the monthly parking lot has increased, and the occupancy rate also increased. Azoom’s closest competitors are unlisted Mirai Office’s Chupa website (https://chumap.jp) with around 31,000 postings and Hatch Work Co’s At-Parking website (https://www.at-parking.jp) with around 25,000 postings while the fourth largest player has around 11,000 postings. Azoom targets a near tripling in its monthly subleased parking lots in the next three years from the present 8,000 to 11,000, 16,700 and 23,300 for 2019/9, 2020/9 and 2021/9 respectively. Azoom’s stable recurring monthly sublease rental business contributes 86.9% of revenue while its parking lot introduction fee income accounts for 10.6% of revenue. The remaining 2.4% of Azoom’s revenue is generated by its outdoor advertisement search site AdWall (https://adwall.jp), monthly parking lot search site for motorcycles Bikeru (https://bikeru.jp), vacant house search site Akiya (https://akiya-navi.jp) and time-base search site Coinpa (https://coinpa.jp). Azoom is also starting Cocomi (http://coconi.work), a location-linked crowdsourcing service where users can earn money by gathering information on areas they live in.
Satoshi Miki 三木聡, of Japan's Fixstars (TSE: 3687)
“Since its founding in 2002, Fixstars specializes in advanced software development service that draws on the performance of hardware and has promoted business with the flag: ‘Speed up your business’. By using hardware-aware software programming technology including parallel processing technology in multi-core environments, optimum use of various hardware architectures, we have been supporting client product development that requires faster processing speed. For example, in the medical field, in the case of image diagnosis, as the resolution increases, the rate of disease detection increases, and processing that took one hour is completed immediately, which leads to reduction of burden on the medical site, improvement of efficiency and in turn could save life. Even in drug discovery, accelerating the simulation results of active ingredients may accelerate the development of innovative new drugs. In automated driving of cars, the probability of preventing accidents will increase if the brakes are taken earlier even if by 1 millisecond after the danger is detected. Trust from our customers is thick as we can offer value that other companies cannot realize. We will improve the quality of life for people, protect our health and our lives. We can do useful programming for human beings and we are proud of our highly rewarding work in terms of social contribution. We are a group of super engineers who contribute to human society by making use of ‘high speed’ technology.”
“Today, along with the dramatic evolution of artificial intelligence (AI) technology, it is said that computer intelligence will surpass human intelligence in the near future. IoT / AI technology that analyzes and utilizes a large amount of data will be adapted to many fields such as automatic driving, robot technology, medical diagnosis, factory automation, genome analysis, finance, marketing analysis, and will accelerate the growth of mankind. With the arrival of the IoT / AI era, there is an increasing problem of how to efficiently handle and process a rapidly growing amount of data and how to realize advanced analysis algorithms with limited computer resources and time. Therefore, the demand for high capacity storage technology and high speed processing technology cultivated by Fixstars has increased and plays an increasingly big role in the market. Fixstars will play a major role in solving the problem by utilizing the high-speed technology cultivated so far. For the next ten years, mankind will make substantial progress with the development of computer technology centered on AI. In order to contribute to this great progress by Fixstars' software technology, we will continue to aim for further technological advances while working hard every day.”
“We have a dream of developing a software platform M³ required for the future multicore era and using it in various applications in the world in the fields of medical equipment, inspection equipment, cars and security. Research on automatic parallelization is progressing, but it is actually far from the practical stage. We believe that an era will come in code optimize for various multi-core processors that is tuned by Fixstars engineers is used by application programmers all over the world for medical equipment, autonomous driving, embedded-software equipment, industrial equipment, financial system, computer graphics, etc. Fixstars is riding on the back of dramatic technological innovation in areas indispensable to society. Do you not think it sounds like fun?”
“The second half of the 2000 marks the transformational shift from the end of the high-performance hardware era to the high-performance software era with the amount of data to be processed increasing exponentially which demands faster processing speed. Software created to operate with one core did not increase the processing speed even if the CPU hardware was changed to the latest one such as GPU. In order to derive the performance of the latest processor, it becomes necessary to parallelize the operation so that the target software can use multiple processor units (cores). In order to obtain the performance improvement of multi-core processors, it is necessary for engineers to write programs that distribute the processing to each core. Therefore, unless an engineer writes software explicitly for multi-core processors, the performance gains will not be realized. This has become a big wall for software developers. This is because it is necessary to write a parallel program code completely different from conventional sequential processing in order to construct software utilizing the performance of multi-core.”
“Would a quad core processor be twice as fast as a dual core processor? Double the cores Is not double the speed. The secret that chip manufacturers don’t want you to know is that it’s not about how many cores you are running; it’s about which software you are running on them. Increasing cores does not address the software problem of scaling. Software programs have to be specifically developed to take advantage of multiple processors.”
Fixstars Corporation (TSE: 3687) is the global leader in acceleration software services enabling AI, autonomous driving, quantum computing, IoT, medical image processing, etc. Fixstars serves largely large enterprise customers requiring high-speed calculation and large-capacity data processing in mission-critical applications that include speeding-up medical equipment to better process ever greater imaging data; genome analysis for life science companies; software & algorithm development for autonomous driving & ADAS (Advanced Driving Assistance Systems) in a 66.6% majority-owned JV formed on 15 Jan 2018 with Toyota Tsusho Group’s NEXTY Electronics helping smart cars to process vast data real-time while suppressing power consumption; speeding-up industrial equipment and smart factory; grid framework in risk measurement and derivatives calculations for major financial institutions; quantum computing in collaboration with Jeff Bezos-backed D-Wave Systems of Canada since Jun 2017 etc. Around 70% of the companies that are part of the Tokyo Stock Exchange (TSE) 1st Section are Fixstars’ customers, as well as Boeing, Lockheed Martin, United States Air Force, Army & Navy, and Fixstars has direct customer relationship without the use of distributors and enjoys high customer satisfaction, resulting in a very high repeat rate.
The exponential growth in multi-core processors, GPUs and FPGA used to process ever greater data at higher speed in a wide variety of applications from smartphones equipped with quad-core processors to AI, IoT and autonomous driving has resulted in the high-value problem of lagging development in the software architecture to optimize the multi-core hardware performance. Fixstars’ software services business contributes 74.9% of sales and 90.8% of operating profit, while its hardware infrastructure business accounts for 25.1% of sales and 9.1% of operating profit. Fixstars’ software services in software development include (1) its proprietary M³, an easy-to-use software platform with user-friendly interface that enables developers to build multi-core, multi-node, and multi-architecture applications, as well as provides solution for building data analysis, image processing, financial modeling, and computer vision applications on a cross-architecture foundation; (2) its computational geometry engine that play a pivotal role in advanced graphical information systems, electronic design automation (EDA), computer vision, and motion planning solution, and is “the only computational geometry engine that’s optimized for massive accelerated NVIDIA GPU technology” according to fabless IC designer giant NVIDIA; (3) Yellow Dog Appliance Server, which offers functionality for big data analysis, solutions in industrial applications, scientific technology simulations, and open source infrastructure services. Fixstars is also building its own AI software testing SaaS business Helmi in partnership with SHIFT Inc (TSE: 3697).
Takahiko Yunokawa 湯野川孝彦, of Japan's SuRaLa Net (TSE: 3998)
“The ‘eradication of educational gap’ is the mission of the SuRaLa Net. From the time we began planning and developing eLearning in 2005, we have been working on delivering light even where the light of education is not delivered. Currently, the mainstream of e-learning teaching materials is ‘drill-type’ using mainly video delivery and applications. These are effective for the child with a high willingness to learn, but it is not enough for children with average and low academic ability or learning habits. So SuRaLa focused on teaching materials that can learnt autonomously even for students with low academic ability. Children who have a successful experience in studying can acquire great confidence. By actually experiencing that ‘effort leads to achievement’, we can foster the most important ‘can-do’ mindset in life. By developing such experiences for children, we have developed the possibilities so that future options can be expanded. That is why we are thoroughly focusing on improvement in real academic achievement.”
“We are making interactive animation teaching materials using the program. Most other digital learning programs have charismatic lecturers speaking unilaterally in the video type. Students with low academic ability tend to become sleepy on the way without concentration power. On that point, our program have an animation teacher who teaches a little each time, raising a question to the student. It is difficult to become sleepy because there is a reaction such as ‘I did it!’ Children with low academic ability dislikes studying further if my correct answer rate is too low. Even if it is too easy, they will be bored. Therefore, in SuRaLa, the AI system responds according to the academic ability of each child so as to make a difficulty level to obtain a moderate success experience. Since April 2016, SuRaLa's software has been enhanced with an artificial intelligence voice dialogue and feedback technology developed in collaboration with NTT DoCoMo. The technology gives characters in the software voices that are encouraging to users, and the student replies to the chat bot. The AI voice is not only praises but also a voice to urge the next action and encourage efforts that changed the children's learning. It is a motivating mechanism that allows dialogue and sustain the learning motivation.”
“An animation starts when the children log in to the SuRaLa Ninja! system. The characters begin their actions with the ninja protagonist named Hayate in the center. Voice actors and actresses ask the children questions and praise their achievements in clear voices depending on the scene. The interactive style of instruction enables children to enjoy and learn at the same time while maintaining a suitable feeling of tension. The incorporation of game factors that excite children is another major characteristic of this system. It displays ranks as studies advance, enabling the children to compete with other pupils and win medals on the screen. Furthermore, the classwork progresses in small steps of units as small as 10 to 15 minutes that are elaborately designed to ensure an understanding of the matters taught, giving the children a sense of achievement and a feeling of definite understanding.”
“One of the features of SuRaLa is the difficulty level control of the problem so that so that children can solve comfortably. It is what is called ‘adaptive learning’. For this child, we are going to ask ‘just right problem’. Even students who are not good at learning can acquire a sense of accomplishment that they are ‘able to do’, accumulate success experiences, and acquire academic ability steadily while deepening confidence. There is also an algorithm that automatically finds out the student’s ‘stumbling block’ and teaches it, so you can create a situation where students with lower academic ability can understand. For example, if the score of the linear equation problem is low, SuRaLa gives the child further thrust by discovering where you are stumbling and make a recommendation to pinpoint re-learning of that part, which lead to root-cause resolution. It sounds easy but the educational content of the company is a detailed curriculum accumulated for a long time to produce the results. Those who visit cram schools using SuRaLa are always surprised at the concentration of the children who seriously learn.”
“The pleasure of solving social issues with the core business has become the greatest driving force of our work. We believe that we will build a future through improvement of academic ability of many children. Instead of simply aiming at passing, I always want to build a posture in the children that ‘I will do my best now’ with a view to the future. We can save such a child for them to have the ‘power to live’ and to shift their ability to keep updating the latest learning rather than the final academic record. Because it is a tough world, I hope every day to become a companion to children who have the courage to cultivate their own path and to nurture and raise as many children as I can who can think and act on their own. We will continue to evolve SuRaLa services incorporating state-of-the-art technologies through big data analysis, interlocking with vital data, utilization of AI, etc., as well as offering a whole new educational experience to children to solve social problems while responding to the needs of parents.”
SuRaLa Net is Asia’s leading edu-tech SaaS (Software-as-a-Service) innovator with its cloud software powered by artificial intelligence (AI) technology to personalize learning, serving over 60,000 paid students in 900 schools in Japan (148 private schools and 724 supplementary cram schools as at 3Q2018; 2017: 693, 2010: 144), including over 1,800 students overseas in the developing countries in India, Sri Lanka, Indonesia, Vietnam and Philippines. SuRaLa's game-like software uses a proprietary algorithm to personalize lessons for individual learners to address any gaps in learning and its high-quality interactive easy-to-understand content in small steps with anime characters, such as the Japanese ninja, keep children interested, backed by the real-time learning management function “Slider” to analyze the progress of academic performance and learning, a valuable tool and feedback for teachers and parents. The software’s game-like elements is designed to help learners master new skills who move to higher levels as they solve progressively challenging problems, just like in a video game.
The AI cloud learning system is aware of students’ learning behavior in efforts and goal achievement and differs from conventional e-learning material with its patented algorithm that combines: (1) Adaptive learning function that adjusts the difficulty level, spots and smart-corrects individual learners' mistakes, as well as discovers where the student is ‘stumbling’ so as to make recommendations to pinpoint re-learning of that part, which enables the student to work through the problems on their own effort and also lets teachers and parents diagnose the children's weak points so that lesson plans can be designed and developed to fit their particular needs; (2) Interactive lecture function with the anime character teacher who make motivating and effective feedback and conversations at the right time to expand concentration power, as opposed to most other digital learning programs with charismatic teachers speaking unilaterally in the video format; (3) ‘AI supporter’ function with an AI voice dialogue and feedback technology developed in collaboration with NTT DoCoMo since April 2016 which gives characters in the software voices that are encouraging to users at the right time and urge the next action for deep learning. SuRaLa’s software has programs in math, English and Japanese for elementary through high school students and it is expanding into interactive science teaching materials through collaboration with its strategic shareholder Toppan Printing (TSE: 7911), Japan’s second largest printing conglomerate and the largest textbook printing company, who owns a 4.91% stake.
SuRaLa differs from nearly all other education companies and digital learning players who compete in the red ocean for economically privileged children whose academic abilities were in the middle or higher levels. SuRaLa’s mission, focus and powerful business model with high profitability is providing its high quality interactive software delivered at low cost in the recurring revenue annual subscription model to the extremely underserved underprivileged students with average and low academic ability, including children with developmental disabilities and learning disabilities, and the base-of-the-pyramid segment in its overseas markets in the developing countries in India, Sri Lanka, Vietnam, Indonesia and Philippines. SuRaLa earns high achievement in improving the academic ability of such children. The number of learning private institutions that can be targeted by the company is estimated to be about 40,000 nationwide, and private junior high schools and high schools are estimated to be about 2,000, as compared to the current penetration of 724 cram schools (1.8%) and 148 schools (7.4%), indicating a huge total addressable market with a long runway for growth. In Feb 2018, the Japanese government has revised the school education law which positions the ‘digital textbook’ utilizing tablet terminals as an official textbook and urges its implementation in elementary schools from April 2019 and full-scale utilization from April 2020. The current law stipulates that paper textbooks must be used in class, and the digital version is treated as supplementary teaching material.
Yoshihide Arai 新居佳英 of Japan's Atrae (TSE: 3925)
“The meaning of Atrae is “attract” in Spanish. We want to create the company which attracts people in the world. We provide the industry's first service that innovated in the HR area through technology. GREEN is the matching recruitment platform service based on the big data analysis of huge number of recruitment activities, job change activity data accumulated, including social media data such as Facebook, LinkedIn and GitHub. We realize proposal of optimized job offer for people thinking about change for companies thinking to adopt to create efficient matching through our platform that offers value inexpensively. It is a service that was born with the desire to create a natural world that only really good companies that are cheered from many people can meet truly good people. In addition, we are currently undertaking completely new services utilizing social big data and artificial intelligence with Yenta and the industry’s first employee engagement and organizational improvement platform that is a Software-as-a-Service offering.”
"The point of setting up a new business is whether we can be proud of it. If you launch a business that you can not be proud of, it might be profitable, but it's daunting that you cannot tell your daughter, family members and friends with pride. If you are running a company you do not want to join as an employee, do you feel a little uncomfortable? In a survey, the proportion of ‘people who are enjoying work’ in Japan is only 6%. It is said to be 132nd out of the 139 countries surveyed. From a global point of view, in order to win, it is necessary to innovate by taking advantage of the creativity and wisdom of the members. That is why creating a company that can induce innovation should be the standard in the 21st century. How to scale is more important than anything else. It does not mean that you can expand sales as much as you want, I would like to create a business that I am really proud of and can scale.”
“Providing a service that is appreciated by someone is our primary objective. As a company, it is one objective to maximize sales and profits, but what is more important than anything else is ‘how much can you offer valuable services to society?’, and if that is possible, sales and profits should follow. We will take priority on being someone providing useful services that are appreciated by someone, and then think about monetizing it as a business. Therefore, I am not interested in getting temporary sales by launching imitated things where customers are already satisfied enough. We manage services with emphasis on the intermediary value of how we can create joy and excitement to the world's business people.”
“What I believe is the most important when thinking about how to build a great company is that all the people who get involved with us become happy and have a good life through business with us. It includes the employees, their families, our clients, individual users and stock holders. All of them. Almost all the judgements I made in the past were based on this idea. I believe we can have a truly happy business life when there is a great match between what we crave to do and what we feel obsessed to do as a life mission. In my case, the former is to get trust, gratitude and respect from all the people who get involved with me in life, and the latter is to create a company that can give a huge positive impact on society. After getting to this conclusion, I kept thinking about Atrae with heart and soul. What kinds of companies can give happiness to the employees and their families? If I were one of the employees, would I really want to work here? If not so, then what is missing? How can I harmonize growth of the company and employees’ happiness both in the short term and the long term? I wanted to define an ideal business organization, from scratch. I’ve been still in the middle of the process, but I’m 100% sure that we can realize a match between the two factors when we have a deep consideration on it.”
“I guess it is a both-way interaction. On one side, company leaders should create an environment where each employee can achieve personal growth and fulfillment. On the other side, each employee should seek out the best way to realize both contribution to the organization and his/her personal growth. When we can harmonize the two, I believe we can grow exponentially as a company and as individuals. I think we human beings feel happiness from the bottom of our hearts when we can feel we are making contribution to something important in our lives. And I believe it is the same even in business. There are so many people in Japan that use up their time to earn money so that they can satisfy their material desire. However, this makes people forget about the really important things. Having a reason to live is the best thing. And in this case, people should provide something valuable to the society. I’m not a charismatic CEO. However, I believe I can create a charismatic company that attracts people in the world.”
Xia Shudong 夏曙东 of China's Transinfo Technology 千方科技
“One trend everyone now ignores in the field of ‘smart transportation’ is the future development of the industry. The emergence of big data analysis, artificial intelligence and cloud computing has brought about a comprehensive change in the entire transportation system to solve this traffic problem. The future transportation will be the integration and improvement of the entire transportation system from planning and management to intelligentization of participants. It is not just the concept of cars and roads, but a system of 'people, cars, roads and clouds’. It is the use of big data, artificial intelligence, cloud computing and other technologies to achieve the interconnection of system data, so that data helps cities to think and make decisions, avoid the impact of unexpected events on traffic, and build a traffic environment that is self-regulating and interacting positively with humans.”
“China now views the governance of urban transportation and the improvement of transportation at a very high level. This is not a project for a year or two, mainly a project that lasts for 5 to 10 years or even longer. There will be new changes in our intelligent networked vehicles, and the need for transportation changes to the infrastructure of transportation facilities or traffic information which will also be brought to a new level. Therefore, we believe that the demand for smart transportation will last for a very long time, and these customers have not changed and they are still within the scope of our existing customers.”
“The severe traffic congestion problem provides a great opportunity for TransInfo’s ‘Urban Traffic Brain’ in our comprehensive traffic management or Smart Transportation 2.0 business. Last year, we improved the traffic in Baotou Qingshan District. From the construction of the project to the present, according to the congestion rankings, the results are remarkable. The future demand is very strong. Different from the mature traditional intelligent transportation business, the urban smart transportation business is more diversified and personalized. The contents of the city's smart transportation projects implemented by the company are different. The comprehensive reform plan begins with ‘diagnostic optimization’, such as traffic status diagnosis, route, road, parking optimization, overall solution formulation, front-end sensing equipment installation, and then go through the company’s big data analysis and artificial intelligence platform. The algorithm feeds back to signal control to improve traffic and is an integrated traffic management solution. We have accumulated real-time traffic dynamic data for more than 10 years, our own big data analysis and artificial intelligence algorithms, our own signal control system. TransInfo has been engaged in smart transportation projects for many years, and has rich experience and professional ability to implement projects.”
“The business model of the Beijing Zhongguancun West District project is different from the general project. We won the bid for this RMB 200m project which is about one square kilometer. The bidding adopts the design-construction-operation and maintenance integration. It is not simply equipment stacking and integration, but the integration concept, and developing the solutions to the problems. Data analysis capabilities accumulated by TransInfo for more than ten years of the massive urban dynamic traffic data has become a very big competitive advantage for the company, so this part of the solution is the most important, followed by technology development, implementation, operation and maintenance. There are such needs in the entire 16 districts of Beijing. For example, Yanqing, the 2019 World Horticultural Exposition and the 2022 Winter Olympics will definitely put a lot of pressure on its traffic. This problem exists in all districts and counties.”
“Therefore, in the promotion of Beijing, Haidian's ‘City Traffic Brain’ has been used as a demonstration project for 16 districts in the city. Zhongguancun West District is a very important demonstration point. In the future, we will promote it to the whole city. The model of Zhongguancun West District has a strong replication effect in the city. Beijing's next comprehensive transportation management is not only on the road, but also on the roadside. The urban planning launched by Haidian integrates the entire landscape transformation. The West District of Zhongguancun is now called the Wisdom West, and the road chairs are equipped with charging sockets. Many infrastructural facilities are all intelligent, which also covers the scope of travel intelligence, such as signal control, parking management planning, providing real-time information services, real-time road conditions. The demand for the entire transportation, from informationization to urban governance, has arrived.. The Smart Traffic 2.0 service in fundamentally solving the problem of urban traffic congestion is in the early stage of the breakout, and the prospect is huge.”
“Based on years of industry hard work, TransInfo’s Transportation Big Data Platform has integrated a variety of unique Industry big data resources, covering daily operating data of 10 million logistics vehicles, passenger vehicles, taxis, and average road mileage data exceeding 4.5 million kilometers every day, and integrating passenger vehicle driving position data with a daily average of 10 billion GPS positioning points, and the dynamic traffic information service generated based on these data processing covers more than 200 cities across the country and more than 90% of national and provincial roads. The dynamic traffic data accumulated by TransInfo for more than ten years is diversified and self-collected. It is also interchangeable, covering high-speed and intercity and urban full-field dynamic data. Among them, the heavy-duty trucks and operating vehicle data owned by TransInfo is unique. At present, there are more than 6 million heavy-duty trucks with a capacity of more than 12 tonnes nationwide with operating licenses. We are currently the world's largest car networking company with more than 5.7 million trucks online. In addition, the freight service platform of the Ministry of Communications is built by our company.”
“By the end of 2018, Uniview had built more than 160 Bright Projects, more than 680 Safe City Projects, more than 350 intelligent transportation projects, 625 Safe Universities (including 90% of double-class universities), more than 120 subway lines in 35 cities, more than 50 airports, more than 400 large enterprises, more than 200 top three hospitals, more than 260 highways, more than 240 landmark commercial complex buildings. In almost all major summits in China (APEC, G20, Shanghe, BRIC), historical moments (NPC Meeting, Two Sessions Meeting), in the concert of Jacky Cheung’s concert, there are guardians of Uniview to protect. In 2018, Uniview appeared in the second season of ‘Great Powers’ 《大国重器Ⅱ》TV show, and was highlighted for its Smart City Brain + Facial Recognition artificial intelligence technology which was applied to recover a lost elderly lady among the sea of 100,000 people in 25 minutes.”
[Watch YouTube video from 31:00 to 37:00: https://www.youtube.com/watch?v=enOHxoyhN6s]
SHAO Xue 邵学 of China's Thunisoft 华宇软件 (SZSE: 300271)
“‘Judge Rui’ 睿法官, created by Thunisoft and the Beijing Court, uses artificial intelligence to simulate real judges' thinking to complete a series of accompanying and precise judicial trial affairs, and supports judges to put more time and energy into the judicial trial work. For example, Judge Rui can automatically sense the judge's behavior information, collect information in real time, grasp the habits and rules, help the judge to automatically archive the file, automatically fill in the case information, carry out the file review, sort out the focus, automatically create and generate the judgment document according to the case, give sentencing suggestions, automatically generate court trial outlines, automatically remind laws and regulations during court trials, and uses court-recognized speech recognition as if it were an online senior judge assistant. Judge Rui has won widespread recognition from users and the legal profession.”
“We have been focusing on the information construction of courts and procuratorates for many years. We have witnessed the various stages of legal technology from IT to DT, from DT to AI era, and launched generations of products and solutions for customer needs, which has made the company achieve sustainable and steady development. Facing the arrival of the new era of AI, Thunisoft will continue to contribute to the process of building the rule of law in China. This is our responsibility and our mission. After continuous exploration and research, we finally found a path to turn legal artificial intelligence from concept to reality.”
“Facing the future construction of the rule of law in China, we deeply understand that the resources of legal science and technology, legal research and legal practice should be in-depth cooperation. This is also the driving force and motivation of Thunisoft. Thunisoft is both a participant in the construction of the rule of law in the country and a practitioner of legal science and technology. Over the years, we have developed together with legal science and technology and have made progress together.”
“I hope everyone can give us more opinions and suggestions and can provide more criticism and corrections. Thunisoft has continuously developed and improved through the learning from the criticism of our lovely customers, and each customer's criticism is Thunisoft's development power. I hope that all leaders and friends will continue to support your support and help Thunisoft to develop better. If we can make better products, we can provide better scientific and technological services to our customers for social governance and helping to govern the country according to law. I hope that we can all work together to make greater contributions to the informationization of the court and the progress of the rule of law in the country.”
Susumu Fujita 藤田晋 of Japan's CyberAgent Inc. (TSE: 4751)
“My management style is tolerating most of the time, to endure. About 95% of winning is more about enduring, amongst various things. The remaining 5% is when you make an offense... The work of advancing each piece peacefully without losing sight of the original purpose is perseverance. After listing for 18 years, we have repeatedly made a lot of upfront investment. We have invested in Ameba blogs, smartphone & video advertisements in advance, but thanks to that, we have been able to update our record high profits in existing business and will continue active investment in AbemaTV while the existing business is doing good. To start a new thing, anxiety and disturbance will occur. However, it is the job and mission of management to believe in yourself."
"'If it is not depression, it is not a job', there may be some people who wonder about this catchphrase by Goethe, since ‘if you enjoy your work, life is pleasant’. But it seems to be the case that the work gets bigger when you twist your body to the more depressed one, to think about doing the difficult work. To do that, I must take a postponement of my head and I must feel like bleeding blood. But I have thought that this is the correct attitude toward work. So, if you suffer, the pleasure after doing your work increases proportionally. I think that is the real pleasure of work. What is important is the strength of the heart in adversity. In order to grow, we need a strong heart that does not move even if what people say around me is not positive. It is different from the heat of the heart. The heat ends with a short lived span but strength is not so. It is something that can be trained over time. We also experienced various ups and downs such as the collapse of the Internet bubble, the collapse of the stock price, the major turnaround in the business. I was forced to make a decision each time. I do not think that the decision power is smart or bad, I think whether the mind is strong or weak. For being disturbed by the numbers in front of me or being swept away by the surrounding opinion, my heart is weak. Conversely, if you are strong, you can push through the path you believe is correct."
Norio Shiraishi 白石徳生 of Japan's Benefit One (TSE: 2412)
“’Creating distribution of services.’ This is our company’s vision consistent from the foundation. If Costco is the leader in distributing goods at warehouse stores with the membership system, our company strive to be the innovator in distributing services through a membership Internet mall."
“Our goal is to provide all services to people all over the world at a fixed fee. We are planning to expand overseas as well and offer services such as hair salon, tavern, restaurant, movie theatre, medical service through the Internet. In addition to the outsourcing of benefits and welfare which is the current main business, we are currently developing eight divisions including CRM business for corporate customer service and personal business targeted at individuals. In the future, I would like to expand the business to financial services and to proceed with creating a mechanism for further distribution of services. At the same time, we will expand the number of members, and will also focus on added value such as convenience improvement and ease of comparative review. For example, we are currently preparing a service rating system like Michelin‘s ‘star’ or a word-of-mouth review so that we can select and compare various services such as eating, drinking, medical care, child rearing etc. In addition, we are planning to develop a system of distribution services cultivated in Japan overseas, with a view to global expansion.”
“A personal mantra I care about is ‘Every day effort, reflection on the day.’ Reflecting is an act that you cannot do unless you objectively view yourself. People do not know about myself. Especially when it succeeds or when things are going well. I look back on the events of the day and my actions, reflect on the points I did not reach, and strive for improvement. I think that it is very important to keep moving forward. I think that people with high reflection ability are able to do it. Since I have an optimistic personality, I try to be conscious as a commandment to myself. Because we forget that when we are unconscious. Conversely, it may be my biggest weakness, isn’t it?”
Kei Suzuki 小野尚彦 of Japan's Syuppin (TSE: 3179)
“Everything is a commodity unless it contains 'commitment'. It will be the same for any business, but if you like that product and do not have deep knowledge, you will not be able to go beyond that, but I will beat the limit and barrier if I do it in detail. I realize that commitment and dedication are important properties of entrepreneurs. Commitment brings sticking connection with people. I think that business is an emotion. If you can communicate emotion through business, I think that the possibility of success will increase. As long as there are dreams and hope, we believe we can move forward.”
"We are “Re-value” than re-use. SYUPPIN is a brand new creative business for valuable products. I love my business at SYUPPIN. It has been 30 years for me contemplating to this business. Tracing back to the reason, I think is all because I am in love with those valuable products. I like things that are made with insistence. It is important why we should provide a firm and safe system to protect our customers when they make the decision.”
"This is an environment where you can calm down and concentrate on your work. Everyone in the first place are maniacs who love cameras, so they learn while enjoying themselves. I will not stop when I talk about the camera (laugh). Because the sales staff are human beings who feel attached to "things", they can understand the feelings and actions of customers. We deal with things that are less prone to falling value. There are also reasons to narrow down the merchandise in this way. First of all, each item has a high unit price, it will not take up space. By narrowing the categories, it is possible to speedily enhance the aesthetic eye and product know-how of the sales staff, thereby obtaining high trust from customers. By staying in contact with customers, we can provide high-quality services through synergistic effects of ecommerce and brick-and-mortar retail, such as improving the expertise of staff and making use of the know-how on customers on our EC sites. We specialized in EC and do not incur costs for store development, realizing transaction at reasonable price. We think that it is important not to simply buy cheap and sell at high price, but to properly assess "valuable and valued second hand goods" brought in by customers, and present a reasonable price that customers can agree with.”
Takatani Yasuhisa 高谷康 of Japan's e-Guardian (TSE: 6050)
“e-Guardian is the largest domestic company in monitoring of posts on the internet. We are growing because the internet market is rapidly expanding. Blogs and SNS have become widespread, and accompanying it, troubles related to the Internet have increased. As internet service runs 24 hours a day, 365 days, it is difficult for individual companies to operate and monitor it. I am providing the service of monitoring on behalf of companies that provide blogs and SNS platform infrastructure. We monitor blogs and SNS posting, product reviews at the EC (e-commerce) sites, abusive slander and child pornographic images, illegal drugs or imitations that are being sold at the EC site etc. We analyze texts and images by the system and visually check with humans. The AI (Artificial Intelligence) system to detect and recognize images is jointly developed with the lab of Professor Harada Tatsuya at the University of Tokyo and is introduced for the first time in the industry. The AI image detection system filter images and discriminate harmful images such as child pornography. This is offered as the ROKA solution subscription service and it has a detection rate of 99.5%. Previously, we visually check the images but it was time-consuming and costly, so productivity was a problem.”
"We named the company “e-Guardian" which guided towards the purpose as the ‘guardian god of the Internet’. It was difficult to explain the future business plan, because it was a rare business type at the time, so I cannot present a precedent. So when I explain it to someone outside the company, I say that e-Guardian is a net security company. It was also helpful to have people deepen their understanding by saying the word "Guard All" to the people who use the Internet and the surrounding vendors. I want e-Guardian to become a symbol of security and safety. It is safe to have a Secom mark in the building. In the same way, if e-Guardian is monitoring or had checked on the website, it is a brand that users have confidence.”
"With our recent “Kiducoo AI” technology, you can tag images automatically after extracting text and images, so it is no longer impossible to know people's behavior and profile. For instance, it is possible to derive what the trend is for a specific target, the trends of products used in a specific scene, and use it for collecting marketing data. It is possible to analyze posted images of in-house products to determine similar trends such as people using products, related products in the same photograph, usage scenes, and so on. The three features of this service are as follows: (1) It is possible to identify what the object in the image is and tag it by product name / product name unit, (2) Matching rate improved by 200% compared with conventional image recognition system using AI, (3) Detection rate of specific object from SNS contribution image is 98.36%. By utilizing this service, you can analyze images posted on Instagram, Twitter etc. for marketing, such as recipe recommendation from a photo of a refrigerator. Our image recognition system with a machine-learning system will increase the accuracy of extraction to provide enterprise marketing support and solution.”
“The book that changed me was Kazuo Inamori's ‘To raise the heart, to extend management’. Inamori-san wrote clearly the philosophy of life, what to work for, what to live for."
Mitsuaki Taguchi 田口三昭 of Japan's Bandai Namco (TSE: 7832)
“The mission of the BANDAI NAMCO Group is to provide ‘Dreams, Fun and Inspiration’ through our products and services, and our vision is to become ‘the Leading Innovator in Global Entertainment.’ Our weapon is Japanese IP (intellectual property). Through the IP* axis strategy, which is the greatest strength of the BANDAI NAMCO Group, we leverage characters and other IP to provide the optimal products and services in the optimal business fields at the optimal times. ‘Gundam’ and ‘Dragon Ball’ have the potential ability comparable to Disney works. I think that rolling out those charms to the world is a role. The goal of using Japan's high-quality IP and developing it on a global scale has gradually spread throughout the group. Under the IP axis strategy, we will drive the creation of new IP and regionally oriented strategies by unifying the efforts in each region under the ALL BANDAI NAMCO concept.”
“Gundam started broadcasting in 1979, and celebrates its 40th anniversary in 2019. Why is this being loved for so long? It is my personal opinion, but I think that it will be the world view of the first work ‘One Year War’. The hero Amoro is afraid of being a hero, and if there is something that does not make sense, people will ask ‘why’. I think that it was accepted by fans that they portrayed the inner nature of such a person. Many sequels have been produced so far, but the basic philosophy and idea of Gundam, robot, war, human drama has been entrenched firmly. ’Pretty Cure’ (‘PreCure’) is also the same. Think of the most fresh theme that speaks to the feelings of the girls now. I want you to feel empathy and feel something in the work. The next person absolutely gets bored if you do not do new things. While keeping the basics behind the works of history, we try to use the sense of depth well. There is a fan base and existing users come back because they know goodness. if it is integrated with fans, we will invest, and I think that it is a new appearance to truly appreciate it to build a worldview together.”
Shinichi Tamagami 玉上進一 of Japan's Prestige International (TSE: 4290)
“Our job and management philosophy of the Group is to listen to the inconvenience, troubles and embarrassing things of end users and guide solutions. Since our founding, the Group has always created new services and has continued to grow under this management philosophy. Today, we are developing businesses to solve each problem of customers in various genres such as automobiles, real estate, insurance and guarantee. Regardless of how the times change, we continue our efforts day and night to become the one and only existence that can solve every of these inconvenience, troubles and problems that occur daily for people before anyone else. We aim to grow as a company that can solve social, a group that can provide solutions that are needed by society, trusted by client companies, and appreciated by end users, while constantly keeping in mind social contributions, client companies, shareholders, employees, and regions We aim to become a global company that can prosper. On the other hand, we also listen to the troubles of people working at our company, and we are focusing on creating an environment that makes us feel more comfortable and motivated to work. We will continue to strive to be a company that can help people to grow.”
“I experienced inconvenience when living overseas for over seven years due to differences in language and culture. I hope to be able to receive high quality and warm service even when overseas like in Japan. This became the motivation for establishing the company in October 1986. In the following year, I advanced to New York, and I started a service that corresponds 24 hours in Japanese to inquiries from Japanese who had trouble. After that, I expanded the network to major cities in Asia and Europe and expanded the service content. We also cultivated domestic services and expanded our business.”
Mark Brayan, Dr. Julie and Chris Vonwiller of Australia's Appen (ASX: APX)
“There are three key components in successful machine learning: compute power, algorithms and the right data (and lots of it). In order to learn, software ‘machines’ such as speech engines, search engines, predictors and recommenders, must ingest vast amounts of data to help them find patterns and predict outcomes. The greater the volume and the higher the quality of the volume and the higher the quality of data applied, the better the machine learns and performs. And the data is where Appen comes in. The data that the machine learns from has to be collected, prepared and delivered into the technology. Data truly is the ‘unsung hero of artificial technology.’ The increasing demand for data for machine learning and Appen’s scalable capability for the provision and structuring of high quality data for places us in a very strong position for future growth. We’ve been doing it for 22 years, so we’ve been a major force of improvement in the industry, helping to evolve AI to where it is today. In some cases, we work with our clients to use or ‘decorate’ their data to improve their systems, as is the case with our search engine projects. In other cases, Appen captures and prepares the data for our clients. For example, language and speech data is especially important when you’re training AI to interact with people—and we’ve worked in over 130 countries, in over 180 different languages. We’re really an established expert in the field.”
“Appen’s secret sauce is our crowdsourced model. We farm out tasks to between 30,000 and 40,000 people every month, who each get rewarded for helping train the company’s machine learning capabilities. If there is any challenge for us, it’s finding the right amount of humans to do the work. The artificial intelligence that we provide data for is generally AI that mimics a human function. So speech, sight or some sort of complex decision. Consequently, we use humans to build those data sets. We’re providing working opportunities to 30,000 to 40,000 people every month. And they get rewarded for it. We’re providing job opportunities for people who can’t get a job, or can only work at home. That’s a really positive side effect of our business, supporting these people.”
“Society was approaching a tipping point for the use of voice to become a regular interface with technology, and Appen was well positioned to benefit from this. We are fast approaching an inflection point for the mainstream use of voice as an interface with computing devices, and utility of products such as digital assistants will be dependent on quality training data from companies like Appen. It's estimated that by 2020 at least 50% of all searches will be through images or speech."
“Voice is becoming a more common way to interface with technology. We’ve gotten used to the idea with our phones: asking the built-in virtual assistant for directions, to search for things, to play music. Now more people are using voice recognition technology with at-home assistant devices (like Amazon Echo and Google Home) that can answer questions and help you with simple tasks, including basic online shopping. Because they’re all based on machine learning, the more we use these services, the better they get. The more they learn, and the better able they are to recognize the voices of the people who use them. They store information about what questions you’ve asked in the past, what you’ve bought. As they improve, they’ll become more useful and a bigger part of our daily lives.”
Tony Klim of Australia's Bravura Solutions (ASX: BVS)
“I have always admired my father more than anyone. He was born in Poland and endured significant suffering during World War 2, including losing his family and enduring a Siberian labour camp. He eventually managed to join the Royal Navy in the Middle East and went on to university in London, later becoming a leading scientist in his field and an inspirational father.”
“Australian wealth management regulations aimed at reducing conflicts of interest and increasing transparency for retail investors such as the government's Future of Financial Advice reforms have led the world. Bravura is well positioned to take advantage of this shift because investment companies will be forced to replace ageing systems with a more efficient technology, such as Sonata. What we are selling to the big wealth managers is new products and the consolidation of existing systems. You see lots of vertical legacy systems built on 1970s and '80s technology. Each has its own separate team and database. It's hugely inefficient and expensive to operate. We are seeing more and more moves to web-based services, and to the D2C market, and you need highly scalable, very efficient technology to do that.”
“Our software platform Sonata allows asset managers to roll out new products with ease while at the same time complying with tougher new regulations that have sought to create transparency for ordinary investors who buy the products. A number of clients say, 'what we like about Bravura is you do the boring stuff efficiently’. Our product is like the engine under the hood. Everyone looks at the leather seats and the stereo and so on, but unless you have a smooth-running engine that doesn't use a lot of fuel and so on, they aren't much use.”
“The current slew of re-platforming decisions marks a critical moment for the sector. The contracts we sign with clients typically last 10 to 15 years and are normally extended. So the decision to change core technology is taken perhaps once in a generation.”
Randy Chien Chuan-sheng 簡川勝 of Taiwan's Innodisk (GTSM: 5289)
“Innodisk is one of the few memory module manufacturers in the world focused on non-consumer storage products such as industrial control, enterprise and aerospace defense applications. Although the certification period is long, we will not be easily replaced after entering the customer supply chain. Industrial control products typically require a five-year supply guarantee, the degree of customization is very high, and the customers stress technical services. Innodisk will continue to focus on the niche market, including high-performance server products, embedded industrial rugged products, customized special products, including servo-related products for robotic and automation. As far as industrial applications are concerned, the first five years are the hardest days for cultivation, but once we penetrate into the supply chain, the volume of orders will be steadily magnified and new customers will be added every year. Our number of customers reaches more than 2,000, and the customer base is very stable. Customer demand for industrial control memory applications is very complex. Innodisk focused on the R&D capabilities of the firmware since our inception, and tailored the most suitable combination of software, hardware, and firmware to meet customer needs. Innodisk has established a threshold that is not easily catchable by competitors.”
“In the industrial storage market, Innodisk earns money from doing what others do not wish to do, and also earns money from doing what others cannot do. We have the power to understand the requirements of specialized markets and help accelerated the launching of our customers’ products. The industrial control market emphasizes customer service and customization, and the market is difficult to enter. But what is even more different about Innodisk is that despite our wide reach, Innodisk must be an expert in every specialized market we target. We occupy the position of ‘experts for vertical market applications’. It is not a customer who requests us to do it. We can serve our customers in a more professional and proactive way, such as the latest in-car vehicle field. Innodisk’s in-vehicle team has an in-depth understanding of the industry, including special requirements for the in-vehicle products in industrial control storage devices, including stable temperature and shock resistance. Innodisk's products also help our military customers to prepare in advance the TS16969 certification."
“Innodisk focuses on the field of industrial control memory and is different from consumer memory. Even if the market conditions of consumer memory are good, Innodisk will not jump in. The most difficult part of operating a business is to persist in focus and not doing anything else. Instead of thinking about how big the entire market is, you have to look at yourself. How much better you can do. The total addressable market of industrial control products is big for Innodisk, so why do we want to do consumer flash memory products? Industrial control is also a resilient business with strong roots. When the economy is good, we can feel the afterglow, but it will only pour a bit of rain when it rains.“
Dr. Koh Kwangill 고광일 of Korea's Koh Young Technology (KOSDAQ: 098460)
“The inherent DNA of Koh Young's members can be called the unwavering spirit of challenge. Koh Young challenges the products that are not in the world. It is a strategy that we create the markets. To develop a product that is not in the market is going to a path that no one else has. We hate doing what others do. When we entered the robot industry, the US, Germany, and Japan have already been doing this business for 20 to 30 years. We make robots that go beyond the products of advanced countries and sell them to the world market. Fortunately, test equipment is software rather than hardware. Software and 3D machine vision architecture technology for accurately measuring, recognizing and processing vision data of arbitrarily shaped objects with various reflection characteristics at high speed in combination with robot technology and AI. This field is our industry's future. Koh Young's success in developing the 3D SPI for the first time in the world was like a miracle. We walked our whole life. The experience of product development success is embedded in the organization and is the force that keeps it going. In markets where there is a new product, we shook the market order to make first place, and if there is no market, we are willing to create a new market.”
“Robots are the ‘guns’ of the 4th industrial revolution era. Companies that cannot get on the Fourth Industrial Revolution will die. We invested in AI for three years, and we're already making a difference. It's a combination of robot and AI. Koh Young introduced a new equipment that reduces the defect rate by analyzing the type of defective product by connecting the production equipment of electronic products to the inspection machine network and analyze in real time whether or not the production process is abnormal. Customers were surprised. If you do not want to follow your customers for the rest of your life, you have to move your customers beyond expectations."
"Koh Young has developed a brain surgery robot based on 3D measurement technology. Koh Young has developed a navigation sensor for brain surgery that displays the environment in the brain with 3D vision technology and developed a medical robot for brain surgery. As a brain surgery robot, it succeeded in miniaturizing the equipment by attaching it to the operating table for the first time in the world. Currently, micro-area surgery in the field of otolaryngology and neurosurgery diagnoses lesions based on pre-operative medical image information. It is impossible to completely avoid excessive incision or radiation exposure. The solution to these problems is our surgical guide robot system using a miniaturized multi-degree-of-freedom robot, medical image-based navigation software and high-precision 3D medical sensors. The combination of 3D sensor technology and robotic system on magnetic resonance imaging (MRI) and computed tomography (CT) images of the patient's brain region. Our robot system is expected to minimize the damage to the human body through the shortest path surgery and ensure the safety of the operator and the patient at the same time, so that the accuracy of the procedure and the success rate of the operation can be significantly improved. We will continue to create new value in the medical field by combining medical diagnostic equipment and 3D technology. We have always been thinking of making the best products if it is not the first product in the world. We will make a company that can stand the number one position in various fields beyond the testing equipment market.“
“My management philosophy is to not recognize people as cost; that the employee is a dream partner with the CEO; that a human company, a brilliant company succeeds and that sometimes you need a reckless challenge. The secret to overcoming recession is that there is no recession in 1st place product and Koh Young makes product and offers solutions that are the only one and best in the world.”
"It is love in the end. Not only does it require loyalty as a member, but the company must also love people. That's how we pair. Those who devoted their lives to Koh Young, I am going to pay attention to how these people are responsible for their lives.“
Nobuaki Komori 小森伸昭 of Japan's Anicom Holdings (TSE: 8715)
“Our company name Anicom is “Ani (life) + Communication (mutual understanding) = infinity" as the root of our corporate activities. This comes from the belief that what seems impossible can become possible when living souls cooperate with one another and work toward the shared purpose. 18 years ago in 2000, I left the major insurance company Tokio Marine, and I started Anicom. The reason is simple, because I wanted to do an unprecedented insurance company. I wanted to create a preventive insurance company. If you know the timing and probability that someone will become sick in advance, you as an insurance company can tell insurance members in advance. Do you not think that person is kind?"
“Although the role of insurance company was only insurance payment, the original role is to reduce social risk. For example, taking car insurance as an example, if I know which car intersection happens frequently for accidents, I can change the intersection and prevent the accident from the root. Since we have built our own ecosystem, enormous data from cooperating animal hospitals are fed back. From accumulated data, you can prevent illness. We set up medical examination and health guidance. We are promoting product development aiming at being able to share a longer time with both pets and human beings to be healthy.”
“When taking a pet to a hospital, you have anxiety that you do not know how much money you need. Anicom's pet insurance is like human health insurance. We have tied up with 6,200 hospitals nationwide to reduce the financial burden of the owner for treatment, and to help the veterinarian provide the best medical care. Our OTC settlement system, which facilitates a smooth link between policyholders, animal hospitals and Anicom, is available across nearly the entire country. The high barriers to entry in this segment of the market give us a substantial competitive advantage. We were the first company to establish an over-the-counter (OTC) settlement system for animals in Japan, allowing policyholders to pay only uncovered amounts out of pocket simply by presenting their insurance card at the hospital (similar to the National Health Insurance system). “In the traditional pet insurance model, the policyholder paid the full medical fee at the hospital and later asked the insurance company for a refund by mailing a claim form to the insurance company. Every claim incurs administrative costs such as bank transfer charges, postage, and assessment costs. Our business model has reduced this cost to about 10%. Although around 85% of claims are made over the counter, we have also started a claim service using LINE, which combines convenience with business efficiency. This business model is centered on increasing the ease of use of insurance. This is important as medical treatment for animals is characterized by low cost but high frequency. ‘Ease of use’, therefore is Anicom Insurance's greatest strength. We have always worked to expand the network of hospitals accepting Anicom insurance with the development of an insurance claim system linked with hospital electronic medical record. Consequently our network has grown to 6,200 hospitals (more than 50% of all animal hospitals in Japan), far exceeding our competitors and giving us competitive advantage. Partnerships with animal hospitals is essential for the pet insurance business model and effectively serves as an entry barrier. In addition, we started a service that is also pleasing for pet shops. Animals were ‘100% compensated’ for the first month because the animals tend to get sick if the environment changes. As a result of this, complaints from customers decreased, and shops were able to sell pets with confidence. Creating convenient systems for owners, hospitals, pet shops was a factor in the success of Anicom.”
“Anicom receives monthly premiums from insurance members. I am paying salaries for employees, and I also invest in new businesses. When thinking about what money is, I feel that it is an additive of ‘thank you’ energy. There are interesting social experiments carried out in which children from any country are asked to ‘draw money’. They usually draw a circle or a square. And write a number in the center. Apparently, the average image of money is figures. Next, when you urge them ‘Please exchange this money for something that someone has’, everyone adds the word ‘thank you’ after the exchange. There is no one who will exchange money by saying ‘you are foolish’. In this way, I feel that money is an additive of ‘Thank you’. The amount of 10,000 yen, 100,000 yen, 1 million yen is the result of countless ‘Thank you’ accumulated. The money in your wallet may be a positive energy entrusted by someone. As you usually do when you exchange money, if you take a perspective like this, your consciousness may change. Anicom's premium income exceeded 31.3 billion yen. This money is also the addition of ‘Thank you’ received from our subscribers. You cannot waste this energy. What value can you offer to the society that raised you?”
Atsuhiko Yamazaki 山崎敦彦 of Japan's Yamashin-Filter (TSE: 6240)
“Yamashin Filter’s management philosophy is 仕濾過事, which means ‘contribute to society through filter business’. Our company has continued this philosophy for 60 years and has contributed to society by delivering high quality filters. Filters are the unsung heroes of industry, working quietly behind the scenes, unnoticed by most people. Yamashin plays a vital role in our everyday lives. Our filters are installed in most of the world’s hydraulic excavators in use today and can be found in surprising places, such as on production lines in the alcoholic beverage sector. Customers across many industries have chosen our products because they recognize Yamashin’s superior development capabilities. Yamashin filter's challenge has only just begun. We are positioning the present as the second foundation. We will continue to develop innovative technologies, aiming to offer solutions for different industries to expand its reach into even more fields. We aim to be a company that constantly develops and continues to challenge.”
“In management reform, we aim to make a leap from a specialized manufacturer of construction machine filter to an integrated filter maker. Specifically, it focuses on establishing the company's product structure with the three pillars of ‘filter for construction machine’, ‘industrial process filter’ and ‘new material’, and a review of supply chain. We are focusing on developing new products. Currently, about 90% of Yamashin filter sales are filter business for construction machinery. We are developing and establishing mass-production technology of the new fiber material of synthetic polymer nanofibers which are expected to be used in various fields such as medical, regenerative medical, agricultural, aerospace, apparel, other than hydraulic applications. Applications of the new nanofibers will also benefit liquids other than oil as well as gas, so our future business area will expand significantly. If we separate the conventional stereotype of filter for filtration, we think that there are also new ways to use filters. It will be expanded to insulation materials, sound insulation materials and water filters. The late American President Kennedy said, ‘The time to repair the roof is when the sun is shining.’ We are fortunate that we should do the work for this future when we are stable and growing as the global number one leader in this niche field. We will make sure to prepare for the next stage when we are in good shape.”
“We are focusing on ‘IoT conversion’ of hydraulic filter. The filter is a consumable item and needs to be exchanged after a certain period of time. In the past, when the passage resistance of the filter became high to some extent, it was informed with an indicator. However, by developing a sensor called ‘Swift Lock’, we are now able to grasp in real time, such as 20% or 50% of consumption. By aggregating this together with GPS data, users can visualize exhaustion status of filters of construction machines operating around the world. The sensor checks the oil condition of the construction machine and judges whether it is normal or not. It is possible to prevent an emergency such as a sudden failure of the construction machine. It is also a great advantage for a construction and civil engineering company that is a user of a construction machine. If the hydraulic filter is the ‘kidney’ of the construction machine, the oil is just like ‘blood’. The same mechanism that humans check health condition at the hospital is also made for construction machinery. We are also experimenting the sensor in various environments such as desert.”
“The biggest difference of Yamashin with other companies is that we are a R&D type of organization in designing products with VOC (voice of customers) in mind. If there is an order from the customer, we will do from the development of the filter material which is the essential part of the filter. Demand varies depending on the manufacturer. Normally, the finer the filter, just like when scooping water with a mesh or sieve, the greater the resistance to fluid flow. In addition, if the ‘garbage’ is blocked, the passing resistance becomes even bigger. However, filtration technology aims at resolving the contradictory properties of refining the fineness of the mesh while taking a lot of trash and having the ability to work in high pressure applications. For example, we are asked to develop filters with detailed specifications such as ‘how much garbage can be taken’, or ‘how quickly oil stains can pass through’, or ‘how not to miss the smaller oil stain particles’ or the filter durability or useful life in ‘how long can it last’. For the development of a small construction machine, the need could be to quadruple the operation time, yet halving the size of the filter. Yamashin takes into account flow rate, operating temperature, environment and total cost of ownership (TCO) when developing filter technology. This coupled with over 60 years of experience allows us to supply customized filters for each specific customer applications. Our greatest strength is that we can procure, design and develop the filter material according to these customer needs internally and we are pleased to accept such requests. In order to make filters useful for the construction machines or for the next generation aircraft, we are trying to make products that customers desire most. This quality and superior development capability is still the most important factor when customers purchase our filters. We keep in mind the fine-grained service. In order to respond to customer's request, sales staff need knowledge equivalent to that of a ‘sales engineer’. Companies in Japan and overseas bother to purposely choose the filters of Yamashin when there are others that are more affordable and less expensive. This was because we conveyed quality, as well as various prompt delivery and after-sales services using IoT, and our attitude towards making things.”
Koichi Nishikawa 西川光一 of Japan's Park24 (TSE: 4666)
“With cars becoming indispensable in everyday life, the role of the parking facility is changing rapidly from a mere place where vehicles are parked to a center of urban activity. The Park24 Group aims to help achieve a comfortable automobile society by developing and offering mobility services, including parking, car sharing, and car rentals, and expanding our membership network. We aim to create new mobility services by utilizing the network, know-how and various data that our group has built up and accumulated. The Park 24 group will make every effort to remember the challenge that is the DNA from our foundation and continue to take the customer's voice firmly, in order to become a transportation infrastructure service company to contribute to the development of the mobility society of the future and to meet the needs of the times. We aim to make Park24 indispensable to the automobile society, and to all of our stakeholders, by expanding our operations in Japan and developing overseas businesses to drive our future growth, and by creating new forms of mobility.”
“Our greatest strength is our ability to create networks using our TONIC (Times Online Network and Information Center) IT infrastructure. While expanding the scale of our existing management resources, such as members, vehicles and parking facilities, we will continue to deploy our Times Pay settlement system and capture driver destination information within communities as part of our customer sharing and business support activities for stores near Times parking facilities. We want Park24 to be a driving force in the new mobility society. We will work to achieve this vision by networking these management resources and using the big data that they generate to offer services that anticipate changes in the automobile society, including the provision of temporary parking for self-driving vehicles, new mobility services based on self-driving vehicles, and charging facilities for electric vehicles. Park24 is dedicated to the realization of its corporate philosophy of creating a comfortable automobile society.”
“Car sharing is a new and convenient way of transportation and plays a key role in urban transportation. For a monthly fee of 1,030 yen, or about $8, members who sign up online or with a smartphone receive a member card that functions as a car key. Vehicles are booked online or using Park24’s smartphone app. Subscribers are charged in 15-minute increments of 206 yen. There is no need to refill the gas tank before returning the car. About 55% of the members are in their 20s to 30s. One quarter is female and three thirds are male. One-third is a corporation and two-thirds are individuals. The average usage time is around 3 hours. There are many young people who do not have cars. Young people now are not so concerned about possession. There is little sense of resistance to sharing. The house is also shared. Rather than forcibly live in a narrow place in a one room, it is better to live comfortably in a house with about 5 people. I think that the car society is changing in declining desire for car ownership with new car sales on a gradual decline for the past decade, but there is a consciousness to ride. It is often said that car sharing deprives the demand for cars and competes with automobile manufacturers. However, based on analyzing the data we have, including user data on Times Car PLUS and the parking lots in and out of the country, it is clear that car sharing created new demand from people who would not have gotten on the car. More companies have been using the cars to do business near their offices of late, boosting our car sharing utilization rates in the previously slow weekday midday stretch. Our strength is not on the street, but outside the road where we provide convenient Times parking lot. Car sharing is an optimal business model for parking lot operators and I think that players in other sectors including car manufacturers will find it difficult to enter. Times Car Plus vehicles can be found near almost every train station in central Tokyo and 60% of the shinkansen bullet train stations outside the capital. We have around 49,000 vehicles in the mobility business of car sharing and car rental pools and a network of around 18,000 parking facilities across Japan to hold vehicles available for car sharing. We aim for 100,000 vehicles and to expand the domestic parking lots to 1 million units.”
“An IT system is essential in order to stably move parking lots of this size on a daily basis, providing the location of the Times parking lot and empty lots information instantaneously, reducing the driver’s difficulty of finding a parking lot. You can also use credit cards and electronic money settlement. Times Club members can also collect and save loyalty program points on their Times Club Card. Without this system, it would not have been possible to expand at the current pace. Even if the parking lots in Japan doubled to 1 million now, the system itself can tolerate, and because of this system, innovative new services such as Times Car PLUS car sharing and B-Times parking reservation could be introduced and we can discover new possibilities, develop new businesses. By using this system, all parking lots, car sharing cars, car rental are connected online.”
“I tried to introduce this TONIC IT system at around 2000 when I presented at the board meeting that ‘we cannot survive unless IT systems are introduced in the future.’ At that time, Times parking lot had been rapidly increased, but it was in fact impossible to manage even what was broken. Since I could not get any data before the introduction of TONIC, I did not know whether the parking lot was working properly and how much profit it generated unless I went to the site. I envisioned the fear that management cannot be done when expanding in such a state. It was imperative to introduce the IT system quickly. When I started taking data from a certain time, I found that the loss due to cars not being charged accounted for 15% of the total. As the sales at that time were about 20 billion yen, there was a loss of 3 billion yen. If there is such a loss, if you make capital investment and reduce the loss, profits will be improved. However, the annual profit at the time was 2.5 billion yen. As we proposed an IT system investment of 4 billion yen, it was dismissed twice by the board of directors. But I did not give up. I tenaciously persuaded the founding generation who gave the go ahead the third time, saying ‘Do as much as possible’. Well, I had a hard time, there was no company to cooperate in making the system. We did it on our own and I checked the machines in the parking lot one by one, analyze the circuit, rush around with the staff.”
“With the introduction of TONIC in 2003, we connected all of the Times parking spots scattered all over Japan online so that we can grasp the operating situation at a glance and enhance customer service. Information on whether the parking lot is full, empty, crowded, etc. are delivered to web pages and mobile phone terminals, car navigation companies, map companies, content companies in real time. We are able to promptly share information by completing services such as parking lot cleaning, collecting money, maintenance of parking lot equipment and call center all within the group so that we can provide timely and speedy service. It is a big difference. By constructing a management system that utilized IT in this way to discover and recover equipment failures and malfunctions at an early stage and solve information distribution to increase occupancy rate, the gross profit margin improved significantly. The system we created has contributed to revenue bigger than expected. As all data was managed all at once, the range of business expanded widely.”
Yoshihiro Kazumasa 吉弘和正 of Japan's Linkbal Inc (TSE: 6046)
“In December 2011 we established Linkbal in order to connect the world and to make society happy as a platform of ‘encounters’. According to data from the Ministry of Health, Labor and Welfare, the population of unmarried men and women aged between 20 and 45 who are the subjects of our service is about 19 million people, of which those who do not have a partner is about 10 million which is the latent demand. Currently, Japan's declining birthrate problem is a major social phenomenon to be solved by both the public and private sectors. In response, Linkbal is built on the creation of encounters through the operation of the event EC site ‘Town Con Japan‘ where we have 1.34 million members. We are like an ‘event version of Amazon’. Amazon expanded from the company's own sales of books to the sale of products handled by other companies to make it into a marketplace in order to raise the conversion rate of the materials put on the site. We are not only holding our own company events but also selling the events planned by other companies on the site. We are concentrating on creating a mechanism to further enhance the event appeal. Our ‘City Bar Con’ gourmet events is for the purpose of eating and drinking at different restaurant establishments. For the store side, there is economic merit as it is possible to secure sales in the time zone of Saturdays and Sundays and holidays around 2 p.m. till dinner time when there are few customers. We are aiming at a technology company that made ‘events’ key products.”
“We launched the ‘City Con Assistance Project’ that provides the know-how of town management. Even in local shopping streets that are stagnant, it will be booming at once by opening up an event. In Town Con Japan events, young people overflow the streets of the city, together with local people, as well as people in neighboring towns and villages. It was said that people gathered and became crowded like a festival. With the cooperation of Shimane prefecture and Japan Airlines, I also performed a City Bar Con event for 1 day and 2 nights. This effect spread in the word of mouth and consultations from municipalities have been successive. Mr. Hiroyasu Masuda, former Minister for Internal Affairs and Minister for Regional Innovation, commented about the policy of regional creation in a lecture that local regional economy can be made self-reliant through promotion of settlement of young people in suburban and rural areas to have households and to raise about two children to revitalize regional economy. 3% of event participants in ‘Town Con Japan’ participated in marriage and engagement, which turned out to be as high as the major marriage company. The economic ripple effects to restaurant establishments and wedding operators are estimated to be over 140 billion yen annually. Town Con is not only a place for unmarried singles encounters but also attention is being paid to the regional revitalization and economic revitalization effects. Although I also participated in many events when I was single, I was able to meet my wife at one of the barbecue events on Town Con Japan. Taking advantage of our own experience, we are making efforts not only to provide a meeting place but also to plan ‘Town Con’ with a high matching rate of success.”
“In order to make the ‘Town Con’ and ‘City Con’ a success, it is necessary to merge business and users well, and the site exists as a tool for that. In other words, it means that it is a business model with a site, not as a site to support sales and event management. The web team has a wide range of expertise in development and operation. For example, in the case of development, the marketing team presents market trends and trend data, and the engineer creates contents accordingly, from membership registration, user acquisition to payment settlement. It is no exaggeration to say that a company that is also a leading role in engineers. It is no doubt that the teamwork between the engineer team and marketing team played the center role of the company and became the driving force to achieve unusual rapid growth and is one of our greatest strengths.”
separated and divorced and I felt to live in the United States liberates from the cramped situation. My father's company went bankrupt at the age of 18, and I got off to college. Meanwhile, I had a chance to go to the United States in the early twenties. I wanted to jump out of Japan and began to go to University of California’s Department of Business Economics & Political Science, but I faced the problem of having to earn all my living expenses and tuition by myself. when I temporarily returned to Japan during the university holidays, the old clothes boom came. College students asked me, “You live in the USA, can you send me one box of old clothes from America to try?’ Then this business did well. I went back and forth by car every two days to Los Angeles, which was 150 km away from Santa Barbara, to collect old clothes. I became friends with local wholesalers and various foreigners, and they bring the old clothes to me with a single phone call. I was able to pay the university's tuition and living expenses, and I was able to graduate from university without problems. I went on to do my MBA at Oxford University. In 2008, I was invited by the president of Hamilton Lane, the world’s largest gatekeeper for private equity, to set up the Japan office. It is about a year before the Lehman shock. If the Lehman shock happened a little earlier, I may not have been in Hamilton Lane. I worked for about four years at the company and founded Linkbal in December 2011.”
“Oxford's MBA class has a big influence on the establishment of Linkbal. The MBA class was an ‘entrepreneur class’. It was a unique class that made a team of 7 to 8 people who assembled business model ideas and hopefully can start a business. So, I got an idea of a real estate portal site and was made the team leader. Then, as a result of repeated research on the portal site, visiting a real estate portal site company in London, listening to Pete Flint, founder of Trulia, a famous real estate portal site in the United States, who came to Oxford to share his story, I realized the greatness of the portal site. There were also numerous opportunities to hear lectures from many famous entrepreneurs who came, such as Steve Wozniak, one of Apple's co-founders, former US President Carter, and famous investor George Soros. This MBA project was the reason to connect the importance and necessity of IT, which had been vaguely conscious until then, with business.”
“Because I lived long in the West in my school days and work, I was accustomed to a beer drinking pub crawling culture, especially in the city of Oxford during my MBA. Actually, this experience leads to the ‘City Bar Con Japan’ events EC portal in Linkbal now. Even after I came back to Japan, I was still single, and I was participating in wine events. However, there were few events and parties that made us feel the ‘hospitality heart’, such as talking to a friend and introducing friends. I started holding events as part of my hobby. At first, we held a home party of about 15 people. Participants increased so that it could be held at 300 people every month, 500 people at times, which was the starting point of the current business. The turning point was the Great East Japan Earthquake on March 11, 2011. After that, Japan as a whole was not energetic and the self-restraint mood was also spreading. I learnt about the existence of an event that was held in suburban areas where hundreds of young people gathered to interact while eating and drinking at different restaurants and pubs, and the area gets healthy. I wanted to cheer up and energize Japan where many young people come to town in events. At that time, it was held at 10 local places in the district, but the naming was not unified and there was no portal site, so it was hard to obtain information. In order to attract customers, I thought that it is necessary to unify the naming of events and to create a portal site that connects participants and event organizers. We launched ‘Town Con Japan’ in June 2011 as a portal site that shows the events situation.”
Kazuki Kamada 鎌田和樹 of Japan's UUUM Inc. (TSE: 3990)
"セカイにコドモゴコロを (Sekai ni kodomogorokoro wo) - This is UUUM's corporate philosophy, and embodies our desire to create unprecedented enjoyment through ideas that embrace a childlike spirit and bring new experiences to people. UUUM is a company that started with the encounter with HIKAKIN, but now it has developed into the largest creator network in the country. The top class content creators have millions of subscribers, and the individual became the media. On a daily basis, we take on the challenge of delivering new experiences to the largest audience possible by leading a new era of entertainment, where content accepted by like-minded fans is created as an extension of what our creators and employees like and enjoy in the video domain and beyond.”
“Compared to the time I was a child, the manner of content consumption of young people has changed greatly. In the past, in the screen called TV, there were heroes called ‘celebrities’ and we sat down in front of the TV according to the broadcasting time decided by the TV station. But for today's young people, the heroes are changing to YouTuber, and television is changing to smartphones. When TV was the most dominant media, people wanted to become like a star on TV. Now, YouTube has become the media that people regularly watch and through which they encounter the stars they are struck by. Also, they are able to choose the time and content of watching as they wanted. UUUM's numbers are good with such a background in these times. The number of channels was 1,141 in 4Q2015 which increased to 5,877 channels in 4Q2018, a rise of about five times in 3 years. Total number of views over the three months also increased from about 2 billion times to about 9.5 billion times in the same period, also nearly five times more.”
“UUUM was able to make this area a business by building a revenue base from advertising revenues from YouTube to tie-ups with companies and movies etc. In other companies, there are about 1 or 2 people in each office. One factor is that we have made efforts to increase the number of famous creators in the unit of 100 people and even 1000 people. The fact that we have made early investments to strategically acquire powerful creators in anticipation of the next cycle has been a factor of growth. Although this area has been said to have low entry barriers, we made a situation where we made a major investment in acquiring talent in our early first phase of growth and now we are at the second phase stage, making it difficult for new entrants to participate and we are focusing on cooperation with business partners.”
"After various experiences from shop management to business alliance, I had a lucky encounter in 2012 to speak with my mentor Mr. Taizo Son, who is the CEO of venture investment firm Mistletoe, founder of game maker GungHo Online Entertainment, and the youngest brother of Softbank’s CEO Masayoshi Son. Mr Son advised him to start my own company. My second life began thanks to Mr. Son. Another turning point came after I left the mobile phone firm in 2013 and got in touch with HIKAKIN, an old acquaintance. HIKAKIN was already in the spotlight after one of his beatboxing videos earned him a live appearance at an Aerosmith concert. When I learned HIKAKIN actually performed together in Singapore with Aerosmith’s lead singer Steven Tyler, I thought for the first time that I could actually make a business out of doing YouTube. At first, I was thinking about running a direct shopping business on YouTube, similar to what the TV-based retailer Japanet Takata does. But when I learned that HIKAKIN was struggling in his business negotiations with various companies, I began to think that haggling was not something creators should be spending their time on. That prompted me to start UUUM with HIKAKIN, now the company’s top adviser, to support YouTubers so they can concentrate on producing videos. In addition to HIKAKIN, I also asked some top creators. There is a feeling that ‘they want support’ among them. Celebrities in showbiz don’t sit down at a negotiating table and directly ask their sponsors how much they will pay. But no company played a role in managing YouTubers’ talents before UUUM arrived. The prototype of ‘a company supporting the world's most individual creators’ was thus born. The UUUM business that manages creators is living my experiences gained in general affairs and operations which was the cornerstone of support capabilities for current creators."
“Entrepreneurship is not that easy. When I became an entrepreneur, I realized that the business is not born suddenly, the founder must constantly sow seeds. When I am unlisted, when I receive a loan, everything including my personal life will be pledged as collateral. The risk is big. It was when I borrowed 200 million yen from the bank that I first felt the risk. I thought that I had the courage, but I had something to give to take that kind of risk. I do not feel like doing business, I am doing business because I want to do what I want to do, to make it possible for the creators and friends to do their best in the community, doing the necessary work in management support, legal affairs, and so on. A lot of people ask me when I started thinking about an IPO. But I never thought about when to take my company public. I just wanted to be a help to creators by supporting their process for making something they like into a job. It was just the result of pursuing something I like myself.”
“Top and emerging creators are coming to UUUM where creators exchange know-how closely to become an excellent creator. Also because UUUM is a mass of know-how. When it comes to business negotiations, individual YouTubers have struggled to manage their contracts with companies while focusing on producing videos. In addition to providing professional video staff and editors affiliated with production companies, UUUM offers YouTubers the accumulated knowledge of how to create popular works, manage legal matters including video music copyright issues, and consultations for raising the social recognition of our creators. In the past, when you wanted to appear on TV, entering the entertainment office was the path. But on YouTube, the path is decided by yourself. You can do activities even if you do not belong to the office. But when we want to aim for scalability and sustainability, various problems such as legal affairs have come up, and individuals have limitations. UUUM has support capability there. We are constantly listening to what the YouTubers’ needs and their troubles and refining the service we offer, so we are proud that we understand YouTuber best. If you catch a cold, I will send cold medicine.”
“Due to the popularity of creators, companies that ask for tie-up jobs are increasing, regardless of company size, major companies or SMEs. The business negotiation story usually goes like this, ‘Watching videos are increasingly popular, how much is it to engage HIKAKIN by the way?’ Since we are not making a price list, we will ask about the details of the product, the purpose of the promotion, the assumed target and so on and make various adjustments on that. Even though creators work with companies, YouTubers maintain their creative freedom. YouTubers working for UUUM create ad videos for clients, but the clients don’t have control of the story line. The YouTubers may not even favor the products they pitch. If YouTubers find products to be useless, they honestly say that in their videos. We ask client companies to be aware of this. No matter how big your company gets, I will not ask for stability or just ask for sales. What is fundamental is respect for the creators and ‘favorite things’ created. I hope creators can make use of the UUUM platform and environment well and make fun and good things with one another. If you work, you want to laugh and work.”
"Because new things are treated as ‘smelly’ generally, I think that we should push forward to what we thought was good and ignore such voices. YouTuber was also seen as a doubtful and fad thing at the beginning. Japanese people think YouTube is merely a platform for individuals to earn advertising revenues. They tend to consider the YouTuber phenomenon as just a passing fad. But the tide changed instantly since the news article that was published on the survey of elementary school student on what do they want to be in the future when they grow up and YouTuber was ranked as one of the top occupation choices. What we are trying to push is the momentum, so that the majority of Japanese people, including seniors and females, are familiar with YouTube and watch it regularly. When core fans are attached, there is transmission power. When the management philosophy is properly listed, the culture and direction of the whole enterprise can be decided. That's why I wonder what we can contribute to the world. 'Kodomogorokoro' means that you want to positively influence someone by making moving images, videos, a creative output, so that he or she can remember such things as 'that time was exciting and interesting', 'that time was heartwarming', express this in 'sekai' (the world). Start from the point that I want to give something, to do something, to 'kodomogorokoro' something."
“UUUM’s strength as a Tokyo-based creators’ content platform lies in our abundance of Japanese content and demand from overseas fans fascinated with subcultures ranging from anime and manga to more traditional interests, such as washoku (Japanese cuisine). In an era where information spreads quickly through social media, content can naturally travel around the world, crossing national boundaries. The next step we would like to take is to produce content that fascinates not only audiences in Japan, but those overseas as well.”
Takanori Nakamura 中村崇則 of Japan's Rakus Co (TSE: 3923)
“RAKUS is the provider of cloud services which improve business efficiency of small and medium-sized enterprises. There are approximately four million SMEs in Japan. But their business management resources, such as budget and personnel, are limited compared to big companies. In addition, many SMEs don’t have dedicated in-house IT system specialists. Therefore, they are behind in introducing IT and improving operational efficiency. RAKUS has contributed to SMEs’ growth by providing user-friendly cloud services which SMEs can easily adopt. We also dispatch the IT engineers we have nurtured to those SMEs which have a shortage of IT specialists and help them flourish. Our corporate mission is ‘We strengthen SMEs through IT.’ A vast majority of companies in Japan are SMEs and there are four million of them. There are only a handful of large companies such as over 5,000. SMEs employ more than half the workforce of this country. What Japan needs to keep its society safe and prosperous is stronger SMEs. In order to make the future of Japan brighter and more prosperous, we need to improve the work and the lives of people working at these companies. We believe that IT technology exists for that purpose. RAKUS provide SMEs with information technology which is usually used by large companies. We would like to contribute to the utilization of relatively inexpensive IT power Moreover, we have been improving on a daily basis the technology we offer so that SMEs can use it more easily with lower costs. The company name RAKUS comes from the word ‘easy’. This includes our wish that IT systems can be used comfortably and that people working in small and medium enterprises will enjoy work and life as well. It is a great pleasure that we can contribute to SMEs’ business growth and to the well-being of their employees.”
“Overtime characterized Japan. Although the Abe administration is discussing issues from various perspectives, including raising workers' ways of reform as the biggest challenge, the question is how can each company overcome long-standing labor practices? So what I am hoping for now is to make smart operations like using cloud services. What we really are offering is not a system to increase efficiency but ‘mind-richness’. When people can spare time, the heart will be enriched. You can also be kind to people if you are rich in heart. Reducing wasted time will increase the time to think about the future. It is our mission to create such a society that takes care of how efficiently we can create time with ‘easy’ as a keyword in our way of working as well as thinking to offer a better service to the customer.”
“After graduating in business administration from Kobe University, I joined Nippon Telegraph and Telephone Corporation (NTT West) in April 1996 and worked mainly in the sales field. I saved 20,000 yen every month as capital for the establishment of the joint-stock company Digital Networks in 1997. I studied programming on my own. With five friends, we are writing websites and writing programs at friends' home after NTT's normal duty on weekdays and on weekends and devoted ourselves to development. Back then was the beginning of the internet. The Internet has not been widely used in general companies, and there was no email address. Meanwhile, in NTT, everyone has an e-mail address, and there was a training to write HTML and we were developing a free mailing list service. I left NTT in about two years to concentrate on the project. In 2000 the company name was changed to Infocast in Jan 2000. We got funding of 100 million yen from the venture capital firm JAFCO. We achieved over 400,000 users for our mailing list service. We later sold Infocast to Rakuten Corporation in Oct 2000 after Yahoo Japan started acquiring competitors one by one. I established Rakus in November 2000. At the beginning of the establishment, I operated an IT engineer school to train engineers. I devised teaching materials during the day and I was writing programming at night. However, because the market size is very small, the fixed cost is large as I need a classroom and some lecturers, and it is a labour-intensive business, it has been difficult to keep on it for a long time, especially if the number of students decline. So, we dropped the profits gained from the school business. Employees quite disagreed with the decision to stop the school business in 2006 which had achieved 200 million yen in sales, accounting for 40% of the total sales then. Because we had a steady profit then, we did not feel the necessity of closing. However, as an entrepreneur, we have to look not only at profits before the eyes, but more importantly look to the future potential. It seems that this point did not quite get to other employees. I stopped recruiting new students. It took about a year and a half to withdraw completely.”
“Interestingly, I think that there was a tendency that many entrepreneur-oriented talented people were adopted more often at the time I joined NTT West. That's why there are so many people in sync, and if you noticed, there were five people synchronizing together to make a company. No doubt I had a lot of luck to have joined NTT West by the dawn of the Internet. I think 80% of the reason that have reached where we are today is due to that.“
“The purpose of the earlier school business was to create a useful IT engineer. Derived from that, I thought that we should focus on what to do next, using that engineer to create what is useful. We shifted the axis of our business to training and dispatching IT engineers, and we began offering our own various cloud services. One of the services we developed is a mail sharing and management system called Mail Dealer that is currently used by more than 5,000 customers. The Mail Dealer was initially in the red, but because it was profitable in the IT engineer dispatch business, I could invest for long-term growth. Our strength is to adopt a system that hires inexperienced people and develops them into engineers specialized in JAVA and dispatching them to web service providers. With this strength, we can develop new services by our abundant in-house technicians and engineers. I also learnt about the importance of advance cash flow earnings. Once a deal occurs, you can continue to trade with that customer - this will lead to stable business. The current SaaS business is consistent here.”
“The turning point of my life was when I was 27 years old. I felt keenly to protect my health and not continue with unreasonable way of work. The consciousness has changed to working more efficiently, and it also serves as the basis for service development and our current working way. We were focusing on SMEs as our customers for the cloud-based services for two key reasons. One thing is that a major IT company is reluctant to sell to SMEs, which is troublesome due to support for the amount of dollar sales achieved. Another is a sense of mission that we can help improve the quality of life of people working in SMEs who are lagging behind in IT if they introduce the cloud services. The company name RAKUS was named from the desire of ‘making it easier for customers’ to improve the efficiency of corporate operations. I would like to offer open technology and cloud services as used in large enterprises at low cost to SMEs, so that companies will grow by improving work efficiency and contribute to the further development of Japanese society. We cherish how we can efficiently produce time. For that reason, I think that I can work out with my friends who can devise and devote more effort with ‘easy’ as a keyword in my own way of working as well as thinking to offer a better service to the customer.”
“I always try to consciously say ‘I am wrong’. When you become an entrepreneur, people around you usually do not point out your faults and problems to you. That's why I think it's dangerous if you do not rule out yourself as wrong’.”
“Before existing businesses become useless or less relevant when the flow of the world is so fast, we need to sow the next seed, to make investments and foster the next generation of business. If you do it, as soon as you notice that there are cliffs, you can stop and change direction. When I am profitable I will sow the next new seed.”
Mamoru Ito 伊藤守 of Japan's Mainichi Comnet (TSE: 8908)
"Our company has been developing business that meets the needs of students, universities, business and society for a quarter of a century. We receive a great deal of trust not only from students, but also from universities, companies and real estate owners seeking effective use of real estate. Our business is born by matching the needs and solving the problem by providing a ‘one-stop student life solution’. We will seek to realize an increase in corporate value by drawing out the potential value of ‘real estate’. Mainichi Comnet is a coined word combining ‘communication’ and ‘network’ and expresses the basic attitude of our business. The services that we offer students is not just ‘living’ or ‘travel’ but for them to experience an active student life and to be active in society in the next few years. At first glance, the business domain of the Mainichi Comnet Group is seen as a collection of real estate, travel, online media, and human resources business categories, but what is common to all businesses is ‘youth who is responsible for the future of Japan’. That is the value our company produces and it is also what our student life solution business aimed at. We have consistently focus on students since our establishment and we have grown to be the only company supporting students from the entrance (offering student apartment) to student life (club activity related service) and exit (employment and recruitment support service). Our mission is to pursue the challenge to create new value for young people who will lead the future of Japan and those who cherish them, and aim to become a company that contributes to the regional economy and society. We aim to create a service that supports the youth who is responsible for the future of Japan and that which is a mission of our employees, and my role is to preserve such employees.”
“Despite being one of the world's leading economic powers, the living environment of Japanese students is actually extremely poor, and the international student dormitories established by the country and universities are only 20% of the total number of foreign students which is around 240,000 currently studying in Japan. Based on the 300,000 international students planned by the government by 2020, the university is promoting globalization to be selected by international students, but the infrastructure development of international student residence is behind compared with Europe and the United States. Furthermore, about 100,000 college student entrants go from the regional areas to the metropolitan area every year to also consider employment after graduation, and they are starting to live by themselves. We believe that the social significance of private infrastructure development for young people who will be responsible for the next generation is great, we have been doing business with flexible ideas and actions. For example, in order to support the life of students who are forced to search for rooms in a short period of time after deciding to go to university in March, we established an online network that can search for a room smoothly, including a system that updates the vacancy status of each room.”
“The university has entered the era of entrance, the competition for acquiring students is intensifying. Among them, attracting international students is an urgent issue for universities. The costs and risks for universities themselves to prepare land, design and build buildings, and manage and operate university dormitory put pressure on university management. Even if the university side can provide students as much high-quality room at a reasonable price as possible, it was very challenging to create a mechanism of continuous business earnings. Maicom has supported the development and operation management of student dormitories developed by the university. We also participated in major projects such as Kyoritsu Women's University dormitory (243 units) in 2005, Keio University Tsunashima Student Dormitory (125 units), Rikkyo University Shiina Town International Dormitory (71 units) and Tokyo National University of the Arts student dormitory (300 units) in April 2014 for 30 years in which we discuss rent revisions every two years. The design and functionality of the Tokyo National University of the Arts dormitory is compatible for the students as a place where communication and community are born, complete with exchange salon, a music practice room, an atelier, and a soundproof room where you can practice the piano in your room. We create new value beyond the traditional dormitory image. As a remarkable project in the future, the Mizutai International Dormitory of the University of Tokyo is scheduled to be completed in the fall of 2019. This international student dormitory is a huge project capable of accommodating about 1,000 people, developed mainly by the University of Tokyo, and Maicom is responsible for the operation management after completion. We expect it as a flagship example supporting university's advanced efforts by developing, acquiring and operating know-how of Maicom. The 21st National Strategic Project for the revival of Japan in the 21st century, which was decided by the Cabinet in 2010, has the goal of "PFI (Private Finance Initiative) project to 10 trillion yen scale", and there are business opportunities of 86 national universities nationwide. We are also considering participating in the PFI business of the national university student dormitory in cooperation with real estate management company nationwide, and the utilization of public land for our company will become a new promising market.”
“I was born in Yokohama in 1951. After graduating from the department of sociology at Rikkyo University, I could not find a proper job. I found work at a transportation firm which I quit in two weeks, and I joined Yamazaki Bread. I decided to become a model employee who does not quit. I also reward myself by buying a stereo system with monthly instalment. I left after some time because I was depressed. Maybe because you are doing something that is not suitable. Later I worked as a resort hotel manager for over two years. Together with my Rikkyo University friend Toshinori Hara, we started the company when I was 28 in the spring of 1979 with borrowings from my friends in the travel industry specializing in campus training for metropolitan college students. In the early 1980s, the tennis sports became a boom, and the need for campus training where female students also participated increased. I started with a niche business that I can become number one if I try hard. We developed a ‘student life solution business’ that expanded our business field from extracurricular activities support to support new graduates recruitment and development of rental housing for students. Our company’s strategy is developing and finding business opportunities for student needs. While studying the need in campus training for Tokyo metropolitan college students, we went on to do the planning and management of sports and music events, while expanding into business activities such as part-time job information and employment support services for new graduates, all the while building student networks that are unparalleled. Later we expanded into the development and management of student apartments that we did as our core business. We opened our first direct-run student apartment ‘Crest Maison’ in 1988. Currently, we provide effective solution not only for students but also for universities to streamline management and strengthen student services, and corporates and real estate owners to consider effective use of real estate. We listed the stock on the JASDAQ market in 2002.”
“Our real estate solution business is supported by student demand from a stable and increasing university entrance rate even in the case of declining birthrate, and there is an orientation towards metropolitan areas from regional areas as students consider employment after graduation. We have achieved a 100% occupancy rate for our self-managed property 14 consecutive years. For example, searching for a room for those who decided on a university by recommendation entrance starts from the fall of the previous year. We grasp accurately the number of graduates who are to leave next spring by grasping the year of graduation of student apartment residents, and start resident recruitment activities from September of the previous year. It is a fine-grained service that responds to student needs that can be realized only by specializing in the student market. Since contracts connect with parents of students, and a separate joint guarantor is required, the risk of unpaid delinquency is low and the rent collection rate also achieves almost 100%. This is a strength that we can realize a stable rental business with ‘rent guarantee’ to owners as a means of effectively utilizing the real estate in metropolitan areas and realize the monetization of owned real estate because the owner is released from the troublesome work of leasing business and can form good rental assets. The property acquisition is the method of borrowing or leasing all the rooms in bulk, and a method of guaranteeing rent for the owner for 10 years. As soon as the building is completed, we conclude a lease agreement with the leasing company for ten years and we have set conditions to buy buildings in 10 years. Rental income of the lease land is expected for the first 10 years, and as the depreciation of the building progresses, it is possible to buy the building cheaply after 10 years. The rent per unit area is higher than the family-type apartment, and the inquiries from landowners are increasing rapidly. For residents, ‘safe and secure’ is more important than anything else, especially for female students. Our student apartment is very popular because it is more than the typical one-room apartment in which you do not know what kind of people live next door. Also, student apartments with meals are popular because they wipe out worries on the health side that parents are concerned about.”
“College life is a place of learning for students to absorb various expertise, and it is also a place to experience communication with classmates and seniors of diverse values. The student life support business deals with about 3,000 organizations of 100 universities in the metropolitan area in outsourcing services essential for university life such as planning and arrangement of training camps, sports competitions and music events, overseas travel arrangements, costumes for rent, driver's licenses, futsal court management, etc. We are working on creating a place where students who act actively through clubs, circles, seminars and other activities can self-grow as better workers and we help create career opportunities for hiring students. We emphasize the influence of extracurricular activities obtained at learning sites such as training camps.”
“We have the overwhelming top share in the Tokyo metropolitan area in the niche travel field of training camp which has a clear purpose in practice and learning and not for sightseeing purpose, and the expertise required is different from general travel. We have recurring transactions with 100 universities nationwide and about 3,000 organizations in the university student market. In the handling of the training camp, we have achieved results of 500,000 nights per year for total number of passengers and 7,000 vehicles for charter bus service per year. We operate the web site Gasyukuryoko.com 合宿旅行.com/ camping trip.com (http://www.gasyukuryoko.com) that allows users to search carefully selected camping facilities by individual purposes or by area.”
“Our philosophy and code of conduct of 3C 4P (Chance, Change, Courage, Purpose, Possibility, Position, Priority) was forged when we were founded in 1979. ‘Chances are brought about by self-change (Change) and courage to act (Courage)’. Have a goal by themselves, act towards that goal and achieve. Employees themselves feel, think, create what will serve the customer. And the idea is sought from society, and it becomes business. This is the way of thinking. Mainichi Comnet respects employees who challenge with venture spirit. Even if it fails, employees who have continued their challenge and efforts are now active at various stages. We are looking for friends who can work hard together as our employees.”
Shokei Suda 須田将啓 of Japan's Enigmo Inc (TSE: 3665)
“Even if one is not a professional buyer or stylist, there are many people with a fashion sense. A housewife who lives in Thailand sold a gorgeous swimsuit at BUYMA which became popular and was taken up as a fashion magazine and became a hit item. Bottom-up realistic trends are born from ordinary individuals, not from top-down brands and magazines. BUYMA is a mechanism that overcomes conventional common sense and democratizes fashion. Personal shoppers of over 11,500 people in 145 countries worldwide will find and introduce fashionable items, international limited models, items unavailable in Japan. To buyers who are interested, just say the preferences of size, color, styling, and personal shoppers propose the perfect product and send it out. Imperfections and troubles are resolved by the personal shopper and the management staff of BUYMA. Since the real thing surely arrives, high-priced brand items can also be purchased with confidence. The personal shopper's communication is pure and bustling, unlike a store clerk who is weighed down by the store's inventory and sales. The buyer can see the products picked up from all over the world, meet personal shoppers with a fashionable sense, and enjoy the unprecedented shopping experience and ethos of ‘Style looks better when it’s Personal.”
“Regardless of the place of birth or career, BUYMA realizes the dreams of 115,000 people and creates employment. Editors who are active in the front line to BUYMA which trend information of each country will upload attention to recommended products as well. Professionals created a media called STYLE HAUS and broadcast real trends of BUYMA. Items that are quietly sold in a corner of the world without capital strength, so that good products gather support and become hit products. BUYMA can now be sold anywhere in the world. Both the language barrier and the national borders are crossed, and the sellers and buyers who have fashion sense connect with each other. We receive "Thank you" notes from members to personal shoppers for liking, for selecting and delivering the product. We will share that feeling, nurture trust and expand happy shopping experiences. The world in which really good products and experiences are exchanged gradually becomes peaceful. Even when the relationship between countries can be difficult, the connection of BUYMA is fun and certain. With only one mind, there is no distinction and really good products and experiences can be sold. You can buy the most delightful thing from all over the world at just right price. Drawing personal fashion sense and hospitality, BUYMA connecting goods and feelings is a flow that changes the world, and it becomes a new mainstream.”
“The personal shopper is a specialist who supports shopping so that you can enjoy shopping even more by catching the latest trend information with your sense and sensitivity and introducing styling and items according to customer's taste. BUYMA creates new value for shopping services by hospitality-filled services of individual shoppers active all over the world. If the typical auction site is a flea market that sells unnecessary items, BUYMA is a focused specialty fashion shop with the items selected by personal shoppers with fashion sense. If you become a top personal shopper, you can get more than 200 million yen in sales each year, and some housewives earn more than your husband. Because BUYMA does not have a store and does not involve intermediaries, products can be offered at a reasonable price. Also, since the principle of competition among personal shoppers works, we are able to realize reasonable price. Everyone involved gets win-win with each other and the business model will rise in sales. Personal shoppers are happy if they make money, buyers are happy if they can buy it reasonably at the local prices. As fashion goods are expanding worldwide with small lot varieties of various kinds every season, it is very difficult to cover all of them with a single company. We can cover it by using social power. Also, until now, there was no choice other than to give up out of stock, out of size, hard-to-find items. With BUYMA, we can virtually integrate stocks scattered throughout the world by procuring personal shoppers scattered around the world in 145 countries locally, greatly increasing the opportunities for consumers to obtain them. In collaboration with personal shoppers all over the world, we have an assortment strategy that reflects Japanese trends, a personal shopper relation that acquires and educates personal shoppers, an SEO system with specialists who display high rankings in search engines, collaboration with entertainers and models. By enabling social media marketing, thorough PR system for magazines and TVs, low-cost operations that make full use of social, marketing, and technology, it is possible to efficiently expand the scale of transactions, realizing high profitability. Because it is C2C, there is no correlation between fixed costs and sales, and if the amount of transaction increases, the profit margin will rise. That is why sales must not be raised unless they are able to sell goods, and marketing skills have improved so that personal shoppers can also create relationships that will make such products available.”
“There are no other sites with a large number of fashion brands and individual members in the world are supporting it, which is also a strength of BUYMA that other companies cannot imitate quite easily. Creating a network of over 115,000 local sellers in 145 countries around the world is not a thing that you can imitate overnight. Since the externalities of the network will work after the marketplace is created, sellers wanting to put out as much as possible to more buyers, and buyers want to buy more where there are more quality items. While taking advantage of this strength, we are planning to put more emphasis on overseas expansion from now on. I would like to gradually expand into the field of beauty, lifestyle-related and interior goods.”
“BUYMA is not a site that you can easily sell if you put out goods. The quality of goods is high, and it cannot be sold unless it is properly selected. Looking at such a characteristic, it can be said that it is closer to B2C where the personal shopper is a semi-pro rather than pure C2C. Both C2C and B2C sites tend to have problems in counterfeit goods, but there are no cases of fake product at BUYMA. Firstly, when the buyer click purchase, the price is temporarily kept by the company in an escrow system, and payment is confirmed to the seller after the product arrival is confirmed, and there are no money or product troubles. Importantly, I have built a mechanism that leads to more sales as I trade deeply. In the normal auction site, user evaluation also has only ‘good’ or ‘bad’, but BUYMA further breaks it down and evaluates some points that users are concerned about, such as ‘beauty of packaging’, ‘quick response’, etc. If it is low, the overall evaluation falls and it will not sell; if it is high, it will sell. Evaluation is made visible, so you can improve it yourself, so that the service level of BUYMA will rise steadily. The last decision is made by the buyer. Evaluation from buyers is the most important, and personal shoppers with high evaluation are put it in a prominent position on the site as soon as a premium personal shopper, so that they can be active in a more easy-to-sell environment. The personal shopper is trained by Japanese consumers who are very discerning in quality, so the level of fine care such as inspection and customer correspondence is very high. In addition, we have a compensation system for counterfeit goods, damaged or lost products, etc. Since Nov 2014, we have a ‘Return Guarantee System’ not only due to a difference in size of the delivered item but even if the product is different from the image on the site. We also provide services, customer support in case of trouble. We maintain such Japanese quality. We provide services in English as well. Our company's policy is ‘to enable good people and good service providers make earnings’. Good user-rated items are sold, regardless of advertising costs. As we become an evaluation society inspired by social capitalism, I believe that the policy of BUYMA is consistent with the times. We are implementing the ‘BUYMA AWARD’ which chooses the best personal shopper. Based on a questionnaire from buyers, we evaluate not only sales but also added value.”
“Enigmo has a seven-part management philosophy called ‘Enigmo 7’: ‘Be a trainee!’, ‘Aesthetics for work!’, ‘Grasp the essence!’, ‘Open!’, ‘Following real!’, ‘Obsessed with results!’, ‘Limit exclusion!’ Article 1 is ‘Be it a trainee!’ This has been my common values with my colleagues at Hakuhodo when we co-founded Enigmo. Even during my school days, even after becoming a person working in the society, I secretly sneaked into the habit of a newcomer. I jumped into the canal with my suit. Even after entrepreneurship, I do not seem to have changed my essential character, like doing a 250 kilometer marathon in the Sahara desert or the Amazon jungle, triathlon in the Antarctica. I think that it is necessary for a venture that keeps challenging difficult and new things. Although I have grown almost steadily since I started Enigmo, I believe this year 2018 is the year of preparing for various stages towards the next stage. This year will be the one year that marks a turning point when I looked back.”
“Whenever you always do new things, you will definitely come up against the opposite opinion. I think that it is very important to do something new, because otherwise nothing can be done. If you really care about it, do not be afraid of criticism for what you think is right.”
"It is important to keep passion and have calm eyes. To challenge something new, passion to prepare for some risk is essential. However, passion alone is not enough, it is also necessary to have a calm look at the situation in which you are placed. By doing so, you aim for a goal while struggling and you come to be able to do it.”
Li Zhongchu 李仲初 of Beijing Shiji Information Technology (SZSE: 002153)
“From 1998 to 2018, Shiji is now stepping into the 20th year of its development and growth. Shiji has become the leading provider of Chinese hotel information systems, due to this period of transformation. At the same time, Shiji is gradually expanding into the catering, entertainment, retail and leisure industries. Shiji has successfully completed three transformations in the past 10+ years of development. From 1998 to 2001, the Company presented itself as the network system supplier; the next phase, 2001 to 2003, it escalated further, becoming an hotel system technology service provider; the next phase saw Shiji’s growth as a software vendor after 2003. Now, Shiji is experiencing a fourth transformation from software vendor to big data driven consumer application service platform operator. Each transition is the transformation of the business model, when 50% of the Company's annual revenue is from new business and there is rapid growth in the overall income scale, we call it a successful transformation. Several important things precipitated and accelerated this latest transformation. In the last year, we have started to promote our platform business to the market, the Company needs a new brand image to tell the market and customer base that Shiji now represents the “big data” application service platform operator of the entire consumer industry.”
“Shiji was founded in 1998,it has become the leading manufacturer of Chinese hotel information system after three successful transformations. At the same time Shiji gradually expands into catering and retail industries becoming the major software supplier of the two industries. Now, Shiji is responsible for 60%-70% of the market share in the high end sector of hotel and retail industries, and possesses a leading position in the catering industry. The estimated annual revenue of Shiji clients can be as high as 5 trillion RMB. That creates for us the foundation to transform from software vendor to platform operator. In the past 10 years, Shiji's effort makes huge changes in the information system of Chinese hotel industry, especially the high end hotels. Shiji brought Chinese hotel industry global technology, improved management process for high end hotel, trained a large number of local talents who are familiar with international hotel operation and management process, and accelerated the internationalization of Chinese Hotel industry. Furthermore, it will make it possible for our clients to absorb international hotel management experience, hire and retain the such talents and make outstanding hotel management by using Shiji products and services. Shiji will bring the experience to Chinese consumer industry clients and permeate to major world markets. Now we just start our strategy.”
“Shiji hopes to become the consumer application service platform operators that driven by big data, and ultimately become one of the world's consumer application service platform operators. To achieve this goal, we must first consolidate our position in hotel, catering and retail industries by developing new products and technologies. At the same time distribute rapidly in overseas developed countries and regions, develop global leading products and rapidly grab overseas market share by forward-looking investment. Shiji will first invest hotel-related data technology companies, then equip company's application software services on the service platforms that data technology companies provide us. With the increase of our platform service customers, Shiji will first set up our own sales and service representatives in the most clients intensive areas. Due to the popularity of cloud computing and mobile Internet, the entire consumer areas including hotel, catering, retail industries will be more and more integrated online and offline in the next 10 years. Cross industry integration will be a trend under the driven of data as well! The entire supply chain from producers to consumers will be more and more flat. Shiji will take advantage of the established core information system in hotel, catering and retail industries to extend and connect vertically and horizontally, to build up supply chain, multi-channel payment platform, and to complete the transformation from software vendors to platform operators. The successful development of new leading hotel, catering and retail cloud systems and quick migration of existing customers to the cloud systems will be the key to success. I hope that Shiji will be a well-known company globally in 10 years, owning employees and business in world’s core commercial centres. The application service platform will create values for the whole consumer industry, and lead the industry development together with our partners.”
“I am born in Hunan province and I am 55 years old this year. I graduated in 1984 from the Department of Space Physics at Wuhan University. In 1987, I obtained a master's degree in Optoelectronic Technology from the former Ministry of Aeronautics and Astronautics. After graduating, I stayed in the work of the former Ministry of Aerospace. At the age of 25, I served as the director of the Development Department of the Ministry of Aerospace, and was the youngest cadre in that position at that time. I got into computers as a sideline. I liked to study computers, especially network systems. I found that trading companies selling PCs in the Beijing IT hardware hub in Zhongguancun didn't know much about support. In my spare time, I would help some companies in Zhongguancun to solve technical problems. Moonlighting, I found I could make more in an hour as a technical support (500 yuan) than in a month at his work (361 yuan. That made me interested in entrepreneurship. I set up shop in my bedroom in 1998, investing in a nice fax machine whose letter quality impressed customers. A turning point came when I was called in by the Shangri-La to troubleshoot and replace an outdated mainframe with a PC-based system. Opened in 1986, Shangri-La Hotel is the tallest and most luxurious five-star hotel in Beijing. The difficulty of the Shangri-La project is not much different from the other projects I have dealt with, but the project has paid off in surprising ways. I learned later that in fact, the remuneration that Shangri-La gave me was only a fraction of the cost of maintenance that they pay to their IT vendors in Hong Kong. Even if I wanted a higher price, Shangri-La will give it because no one can solve their problem right away. After many years of dealing with Shangri-La and other customers, I have maintained this kind of honesty. This makes everyone willing to introduce more business. At the time, they put the reward in the envelope and gave it to me with the number 5,000 on it. This number is already much higher than the list I usually received. But when I opened the envelope, I found that the envelope was in US dollars at US$5,000. Shortly thereafter, Shangri-La recommended and help bring us high-end customers such as Kempinski Hotel, Hilton, and Wangfu Hotel. Having made a name in the hotel circle, I sniffed the opportunity and resigned from the stable work of the former state-owned unit and started Shiji in 1998. I got a further boost from Y2K worries in 1999 and then after the SARS crisis, when I had cash to snap up hotel-IT support rivals that were hurting. By the year 2000, the number of hotels using the Shiji information network system reached 100, and the number of employees increased to about 20.”
“The most critical transformation of the company took place in 2003, the year of SARS. The domestic high-end hotel industry was extremely depressed, and the overall occupancy rate was less than 20%. Most practitioners believe that China's high-end hotels will definitely not last for the next two years. That same view was held by global hotel management software leader MICROS-FIDELIO which was formed by the merger of MICROS, the largest restaurant management system company in the United States, and FIDELIO, the world's best hotel front management software company. At that time, MICROS-FIDELIO's business in China was mainly concentrated in a few foreign-funded hotels, and the Chinese business accounted for a small proportion of their entire business. Taking advantage of their chief representative's opportunity to meet in Beijing, I proposed to him the idea of acquiring MICROS-FIDELIO’s China business. According to his judgment at the time, if MICROS-FIDELIO can be successfully acquired, Shiji will provide the most competitive hotel system overall solution in the market, and basically dominate the entire market. Therefore, I am determined to win this deal. MICROS sold the source code to Shiji for US$1.8 million. My judgment was fulfilled less than a year later. With the disappearance of SARS, the high-end hotel market in China recovered in 2004 and opened up to a rapid growth rate of more than 50%. Through this transaction, combined with our own technology and self-developed software, Shiji realized the transformation from system service provider to software supplier. This year is the establishment of Shiji Information for 20 years. Looking back on the past, I always believed that I am lucky, and that reform and opening up of China gave me these opportunities. Several members of the Shangri-La staff whose faith in me was a turning point for Shiji. I believes that the sector will have strong demand for a decade as leisure and basic business travel spreads in the country.”
“At the early stage of founding the company, all the work is done by myself. The Chinese characters of company name Shiji 石基 means the ‘Go’ chess 碁 in Japanese. There are three red spheres in the old logo meaning the chess pieces, the blue ball in the middle with irregular colour changes from shallow to deep that cannot be digitalized (at that time we did not even know that it is going to be much easier for printing to use digital colour)means that there is no certain chess mode, the key is to look at the overall situation instead of partial gain and loss. This is the idea of operating Shiji’s business at that time. We must win the strategic projects, but in some cases we don't care of losing some projects. The long-term cooperation with our partners is more important for us.”
Koji Matsumura 松村幸治 of Japan's Grace Technology (TSE: 6541)
“The origin of Grace Technology was a company founded in 1984. This was the very first company in Japan to specialize in producing manuals. Unlike a mere production company that just creates a manual, we are a proposal-type problem-solving company that will not only improve the quality of manuals, but also drastically reduce costs related to production, and even reform the client’s system. During our 30 years of experience in the industry, we have gained trust from many major manufacturers with our solutions, especially focused on technical manuals. Although this may not be a well-known fact, the market related to manuals is actually very large. Manufacturers cannot survive without creating new products, and these products always need a manual. According to certain estimations, the size of the market only for Japanese listed manufacturers is about 7 trillion yen. In recent years, the shorter cycles for new product releases, and the improved performance and functions of products is continuously increasing the information that needs to be covered by manuals. In addition, the globalization of the product market has expanded the needs for manuals for other countries. Some products may require up to 30 to 50 types of manuals in English and other languages such as European languages, Arabic languages, and Asian languages.”
Grace Technology is Japan’s leading e-manual database software-as-a-service (SaaS) innovator expanding into its revolutionary patented AI/AR-guided manual smart glass “Grace Vision” (registered patent no. 6321879 received in May 2018) using Microsoft Hololens. Grace Technology focuses on technical manuals for complex B2B applications serving over 1,700 manufacturers & IT companies that include Fanuc (one of the world’s largest makers of industrial robots), Toyota, ABB, Advantest, Agilent Technologies, Applied Materials, Atlas Copco, Bosch, Bureau Veritas, Canon, Dell, Dassault Systemes, Emerson, Harmonic Drive Systems, Heidelberg, Honeywell, IHI, KLA-Tencor, KUKA, Kurata, Nvidia, Qualcomm Japan, Park Systems Japan, Pitney Bowes, Sandvik, Saint-Gobain, Samsung Japan, Siemens, Sirona Dental Systems, Teradyne, Texas Instruments, Thales, Thermo Fisher Scientific, Tokyo Electron, Trimble, Xilinx; Apple, Autodesk, Citrix, EMC, ESRI, Fortinet, Intel Japan, Oracle, SAP, Trend Micro, Wipro, etc. Grace Technology specializes in the technical maintenance manual of critical industrial machinery of manufacturers from the computer control system of the nuclear power plant to the trajectory control system of the satellite, biotechnology and pharmaceutical inspection scientific equipment and robot engineering, an area with low competition because of the high industry expertise and knowledge required. Compared to the estimated potential market size of 100bn yen, the current market share of Grace Technology is less than 2%. With the compellingness and circumspection exponential edge in solving headaches for its customers to result in substantial cost and time savings, Grace Technology’s SaaS business model generates stable and recurring monthly subscription revenue (based on the data capacity of the manual and the number of users), achieving a 103% and 229% absolute increase in sales and operating profit in the recent 3 years with EBIT margin of 30.8%, positive free cashflow margin of 22.0%, and ROE (= EBIT/ Equity) of 37.9%, propelling a 388% increase in market value since its listing in Dec 2016 to US$278m. Grace Technology’s cloud-based portal site enables users to centrally manage, edit and distribute digitized manual data with user-friendly functions that include its patented “Term Filter” (patent no. 5696280 “Linguistic system and language consolidation program and term collection method”) that allows users to convert technical terms regardless of when or how they are written and replaces all technical terms that need to be unified based on the glossary. The e-manual cloud service also enables on-demand printing service to reduce logistics and warehousing costs, as well as the online ordering and purchasing of component parts linked with the maintenance manual to the EC site. Grace Technology’s MMS (manual management system) e-manual SaaS business contributes 66% of sales and 57% of profit. A key strength of Grace Technology in winning clients such as Fanuc and Toyota is its consulting know-how based on its deep understanding of manuals cultivated from over 30 years of experience. Its MOS (manual order-made service) consulting business accounts for 34% of sales and 43% of profit. Like Keyence (TSE: 6861), Grace Technology commands a high-profit structure by business model design in adopting a “fabless” business model, outsourcing most of the non-core labour-intensive manual writing to 40 external partners, concentrating on the higher-margin front-end design, planning & consulting solution-proposing business and the SaaS-based e-manual database management, thereby positioning itself at the apex of the fragmented manual industry of around 2,500 manual translation companies and differentiating itself from conventional lower-margin manual companies with non-recurring revenue model such as CDS (TSE: 2169), CMC Corp (JQ: 2185), Honyaku Center (JQ: 2483), Crestec (JQ: 7812), etc, who are increasingly being relegated to “subcontractor” status. Grace Technology was the predecessor of Japan’s first specialized manual production company Japan Manual Center Co Ltd founded by Koji Matsumura in 1984 which was merged in 2008 with Grace Technology.
“We are trying to switch from ‘reading manual’ to ‘viewing manual’ while using movies and audio. Grace Vision is the ultimate AI manual that anyone can use easily, which does not need the user to see nor memorize tens of thousands of pages of manuals, not only in Japanese and English, but also in any language. We want to escape from the conventional manual that has bothered engineers so far and have AI to monitor and guide the worker to prevent mistakes and complaints, and to shorten the training period for new workers. e have over 30 years experience in preparing manuals entrusted by manufacturers and we incorporated our existing product of cloud 'e-manual' know-how in AI and developed Grace Vision with AI-related companies. Grace Vision is possible only because we know the manual. We are familiar with where to watch out and what kind of warning should be given. With this know-how, you can input 100% of the necessary information to AI, so that 100% guided manuals will be possible.”
“The AI recognizes the motion with the camera installed in the dedicated glasses and instructs the work by displaying the instruments and instructions on the operation procedures with guided arrows etc. on the spot in AR display. If unknown points occur with the guidance of AI, you can ask AI through the microphone installed in the glasses and you can proceed with the conversation. Also, if an engineer makes a mistake in work, the AI points it out. By introducing the AI manual, troubles such as complaints, mistakes in operations, accidents, etc. can be drastically reduced, and the period of educating maintenance work for newcomers is reduced to less than a third. With optional functions, the health condition such as the worker's pulse and body temperature can also be measured, leading to prevention of accidents due to poor physical condition.”
“In the field of maintenance, it took time to educate the workers who need to check the manual each time if there was an uncertain point, and ask the manufacturer about the trouble. Grace Technology has pursued the ultimate manual that is easy to understand for everyone so far. High performance in complicated shape recognition is also a big feature of Grace Vision. There are many kinds of parts used for maintenance work, and many parts are similar. As the camera will judge immediately whether it is a correct part, it will shorten the picking time. The AI also recognizes through the camera procedures such as tightening the valves, injecting liquid etc and tells the workers how to do it and displays how many times to do so. In addition, it is also possible to call and talk to workers working in different places, so it will be useful for tasks that require team work, such as checking the work progress of the members.”
“Grace Vision can switch modes according to the worker's level. For newcomers who need detailed instructions, the "operation mode" in which AI always guides is appropriate. Experienced, veterans who can work even without instructions are able to work in "monitoring mode" which is minimum or necessary without guidance. However, since AI records and monitors through the camera even in the state of guidance off, when a veteran worker has a mistake in any chance, AI will point out, so it is safe. With GRACE VISION, even if there is a difference in skill of the workers, constant maintenance quality can always be maintained with induction according to the level. AI also supports creation of laborious reports. For GRACE VISION, you only need to instruct AI to report on the end of work. If you tell AI, data is written to the prepared template, AI verifies based on camera record, and it checks whether there were no mistakes in work. Attachment of images can be easily done through the camera, and the completed report can be sent from the work site immediately. Work supervisor can also instantly receive reports from each worker on Grace Vision and check the contents. In this way, Grace Vision can do what you need at any level and in any language, enabling you to work efficiently, reduce costs, and shorten the learning curve on mastering the technology in operation and maintenance of the product.”
Masao Ito 伊藤将雄 of Japan's User Local Inc. (TSE: 3984)
"'User first principle’ is more important than big data and AI. Fashionable words such as big data and AI are meaningless unless users are pleased. Technology exists for users. The real pleasure for engineers is how to change the behavior data of tens of millions of users into valuable information. From the launch of User Local to the present, we have developed and operated products that visualize the user's behavior that is directed in interfaces that users will appreciate. At User Local, we think that intuitive design is necessary in order to utilize data. Since data is often just a number or symbol, in order to make it into valuable data, it is necessary to visualize the data. The data visualized by the analysis can be a common language of the organization which everyone can use easily and can grasp important points at a glance. Organizations often tend to decide things due to personal power relations, etc., but if there is an objective measure of ‘visualized data’, then data-driven decision making is possible. That's why it's important that the data analysis tools are easy to use and easy to understand by non-experts.”
“The origin of the company’s name comes from the name of the disk space "/usr/local/" in the hard disk. It is a folder name like Windows ‘Program Files’. Since the other meaning of local is ‘nearby’, we also have the feeling of being a company with a user-oriented service close to the user.”
“The Japanese AI chatbot market forecast in 2018 is estimated to be 2.4 billion yen, more than doubling from 1.1 billion yen in 2017, and is expected to reach 13.2 billion yen in 2022, according to Yano Economic Research Institute. There are five reasons for its fast growth. Reason 1: Population decline in Japan will mean it is inevitable that AI chatbot will be introduced to replace human to respond to customer inquiries, alleviate labor shortage problems and lower staff cost. Reason 2: Improvement of labor productivity is required of companies in work reform. For example, companies have decreased the number of customer inquiries by 35% in 3 months after introducing our AI chatbot services. Overtime and mistakes were reduced, and staff began to work proactively. The spread of AI such as chat bot is never a distant future story. Reason 3: In order to positively improve labor productivity, we are active in automating tasks incorporating AI. Reason 4: Major players such as LINE, Facebook, have provided chatbot development platform one after another and this is one of the major factors for the spread of AI chatbots like User Local. For example, in March 2016, Microsoft released Skype Bot Platform; April 2016, Facebook announced Messenger Platform; September 2016, LINE officially released Messaging API; October 2016, IBM announced the availability of Watson Conversation federation middleware plug-in; November 2016, Microsoft released a preview of Azure Bot Service. A chatbot ecosystem was born, which means that an environment for people to build chatbots was developed. The use of chatbots is rapidly spreading, mainly focusing on customer support and improving the efficiency of handling inquiries within the company. Reason 5: The chatbot utilization scene is not just handling customer inquiries or customer support in the information system division and helpdesk. Even within the company in corporate support departments such as general affairs, personnel affairs, HR, accounting, as well as in sales and business process manuals, inquiries are completed every day using chatbots to reduce response time and increase productivity.”
“In addition, chatbot has the merit that it can accumulate and aggregate knowledge over the long term without the risk that the knowledge cultivated by an experienced veteran staff over time disappears when he or she leaves the company. The introduction of a chatbot has also resulted in the reviewing of the manual and business process flow. Operating a chatbot also enables the company to quantitatively grasp and accumulate VOC (Voice of Customer) to make improvements. Furthermore, introducing a chatbot to respond immediately to the users’ questions can improve the CVR (conversion rate). On one of our EC clients who operates the websites Odecomart.com (supplements and cosmetics for women) and Finebase.jp (online health food), it was found that the CVR was 8.9 times the overall site average as a result of our chatbot. This is probably because questions and cases are solved on the spot by a chatbot which ultimately leads to conversions. Another example is our AI chatbot to GMO Internet’s (TSE: 9449) GMO MakeShop which is a marketing tool for EC (ecommerce) shops that can provide online shop construction and conduct customer's automatic analysis / e-mail marketing. Our chatbot help GMO MakeShop to automatically responds to inquiries outside business hours and reduces the waiting time of the questioner. In addition, it reduces the human cost of support work and GMO MakeShop is able to devote that resource to the planning and implementation of various measures to improve the performance of their shop operators clients. A good chatbot can lead to a comfortable user experience (UX) as it becomes the first point of contact between the customer and the brand and also after purchasing the goods and services. The chatbot is the creator of marketing innovation.”
“The trend of data analysis technology will change in about 5 years. The first major change was when open-source free databases such as MySQL and PostgreSQL came out. And then the hardware and software continues to evolve steadily. Nowadays, big data processing technologies such as Hadoop and in-memory technology are capable of processing data analysis at high speed, and as a result data retention cost and utilization cost have decreased. In that case, there is no need to carefully select the data to be saved in consideration of cost effectiveness, so now it is the flow to discover new insights from the raw data.
“In addition to visualizing data analysis, what we are working on now is the discovery of consumer insight using AI that can contribute more directly to client companies. Another is the analysis of images and videos. A huge amount of images and videos are uploaded to Instagram everyday, but we want to analyze what is shown in them and what kind of features and trends can be read from the data and understand how products are used in the daily life of people. For example, you know what brand of beer is reflected in the posted photo with your user profile and behavior so that you can understand and develop new insights. We are developing a deep learning tracking technology for that. Because cost will be higher than text analysis, I think it will take time to offer at affordable price, but I would like to proactively proceed.”
“The mechanism of the heat map in WEB analysis tracks the movement of the mouse and creates a heat map from the mouse's log. It has been demonstrated that there is a correlation of more than 80% between the human eye and the mouse movement, and by expressing the movement of the mouse with a heat map, the user's thoughts can be visualized to grasp the user’s psychology. For example, Even content with a large number of PVs (page views) is not necessarily an excellent content as long as attention is gathered only on a part of the page. With UserInsight, it is possible for anyone to easily find problems that can not be found with numeric data of ordinary web analysis tools. Unlike Google Analytics and other access analysis tools, what is different is that we mainly focus on knowing deeply the visitor to get user insight, something which other tools do not understand as these usual tools mainly analyze how the site is accessed and how it moves on the user's site. But UserInsight provides more information to understand users. You can analyze user attributes based on age composition, male-female ratio, access frequency, Internet usage rate, presence of conversion, etc., not only for the entire site but also for individual pages, leading to improvement of the site and which content is appealing to which audience. In addition, UserInsight is superior in that you can check the following information with a heat map unlike all other tools, including ‘How far the user has read on the page’ and ‘Which areas on the page you were reading often’.”
“Even if you are only looking at figures with a sophisticated analytical tool, I think it is hard to tell where the problem is. Instead of blindly analyzing a large amount of data, we first bird's-eye the entire site, then narrow down the problem in a visualized state with a heat map to start improvement. I think that visualization of data in a form that everyone can understand using UserInsight has led to more reliable and highly effective improvement. For some of our SaaS (software-as-a-service) clients, the repeat frequency of their customers is an important point of business success and they can grasp how much each customer is logged in and which functions are used. A study meeting at the beginner’s level, intermediate level and proficiency level is held at least once a month. It covers a wide range of contents from how to use the tool to tips on utilization. We support not only the ease of use of the tool but also the achievement of the site’s marketing success.”
“SocialInsight includes not only analytical tools such as ‘social media listening’ and ‘fan analysis’ but also CRM-like elements of social media called ‘communication management’. Social media listening analyzes how the set keywords are being talked on social media. For example, clients who have set up product name and brand name can analyze how they are being mentioned, and how much they are mentioned from analyzing tens of billions of data from multiple sources such as Facebook, Google, YouTube, Instagram, Twitter, Wikipedia, mixi, etc. and analyze them by our own text processing engine at super high speed and are automatically notified by alert functions when the key words are buzzed to detect the flames and avoid harmful rumors, particularly useful in reputation management and risk prevention. Changes in our own accounts, fans of competitors, transition graphs, influencer surveys, post analysis, and fan attribute analysis are quickly displayed. As our clients such as Rakuten comment, ‘If you just want to see the situation of your company, you can watch Twitter figures every day, download Facebook insights, etc. But SocialInsight can objectively see the situation of the competing sites of other companies.' Another example is Sapporo Beer who used SocialInsight to find out their loyal fans ratio, which is the engagement rate (the fans who gave ‘likes’ or comment actively or spend more time reading the post) divided by the number of inflows to its site. It is a big meaning in terms of how many more core fans there are, not just fans, and how to expand and nurture such layers.”
Takahira Hayashi 林隆弘 and Tomohiro Takahashi 高橋知裕 of Japan's HEROZ Inc (TSE: 4382)
“HEROZ aims to achieve ‘to bring as many heroes into the world as possible’ by ‘AI x mobile’. HEROZ possesses a unique core technology of world-class artificial intelligence (AI) developed by our top engineers that has defeated professional shogi (Japanese chess) players in public matches developed by our top engineers. HEROZ has accumulated such a machine learning technique through the development of smartphone apps such as ‘Shogi Wars’, ‘CHESS HEROZ’ and ‘BackgammonAce’. Our mobile device is the closest and the most accessible device for everyone anywhere in the world today. We believe that every person has the potential to become a ‘hero’ of a certain kind. HEROZ has been and will continue to build on our concept of ‘heart filled with amazement’ which represents our fundamental thought to provide services that would bring excitement and amazement to everyone rather than simply introducing and applying information technologies.”
“Our MLaaS business model establishes an infrastructure which allows HEORZ to provide comprehensive AI services efficiently to solve various challenges in various industries just by changing input data, while achieving stable, sustained earnings with initial setup fee and recurring ongoing fees and high switching costs since output precision increases through repeated machine learning. Client’s input data are sent to HEROZ Kishin and the output generated after machine learning through deep learning are applied in business settings. Results are measured and used for further machine learning. In addition to fixed recurring ongoing fees, ongoing fees in the form of revenue sharing will be introduced in FY04/2019. HEROZ’s overall marginal profit ratio, defined as ‘(net sales –app commission fees –royalties)/net sales’, improves as the composition of AI B2B services increases. Our marginal profit ratio has increased from 67.6% in FY04/2017 to 76.3% in FY04/2018 and 83.4% in 1H10/2019.”
“HEROZ Kishin (棋神) is a unique AI machine-learning-as-a-service (MLaaS) built from the technology cultivated through the R&D of Shogi AI to solve difficult issues in the real world in a wide range of industries, unlocking the value that data possess and supporting your business expansion. Selected companies our AI technology is provided to include Nomura Securities, Daiwa SMBC, Nikko Securities, Monex, Honda Motor, Takenaka Corporation, The Pokémon Company, BANDAI NAMCO Entertainment (TSE: 7832), Hearts United Group/Digital Hearts (TSE: 3676). HEROZ Kishin includes intellectual game, game development, route optimization, placement optimization, prediction, optimal solution search, classification, abnormality detection, sentence processing, image recognition etc. Various engines are installed, and we customize it according to the issues of each company. By utilizing the company's platform, we can clarify the cause of defective products at the production site, automate system verification in the software industry and respond to the shortage of IT human resources.”
“HEROZ has been working with Takenaka Corporation in the construction industry to create an AI system to help design buildings. The AI system will crunch hundreds of Takenaka’s existing structural design data and learn from its architects to provide various patterns for how buildings could be designed while inheriting the knowhow of craftsmanship. The AI will combine tags and lead to reform of building production system. Architects then compare the patterns and consult with clients to decide which one to use. Takenaka expects to reduce the routine work associated with designing building structures by some 70%, giving its professionals more time to focus on being creative. The ability of designers will also increase when they obtain different ideas from AI. One of the expected effects is to improve work efficiency, but I hope that AI will show a totally different proposal from existing one.”
“HEROZ has also formed a partnership with Digital Hearts to use AI technology for software testing which typically accounts for 20 to 30% of gaming development costs. In the game ‘Pokemon Co-Master’. many Pokemon figures appear and move like shogi pieces. Like the AI help in Shogi Wars, the player’s partner is an AI character who think about how to move to the player’s thought in the game to consider combinations and strategies. Due to the presence of AI, Pokemon Co-Master is finished in a game that many people enjoy, as well as those who prefer the high level of strategy of Pokemon and board games. I believe that AI helps people, sometimes people help AI, and players experience a fighting relationship together with AI as a new way of playing and enjoy it. We will be launching AI CARDDASS, a new digital card game brand developed with Bandai, with the first series titled ZENONZARD smartphone app expected to be released in 2019.”
“In the world of finance, HEROZ has tied up with online brokerage Monex to provide robo-advice for people who trade currencies. The ‘Trade Medical FX’ system analyzes their past performance and transaction style and provides suggestions for investment skill improvement. HEROZ also commenced joint efforts with Sumitomo Mitsui Financial Group and Nikko Securities in AI equity portfolio diagnostic service taking customers’ risk appetite into account and AI stock price watch service with ‘LC-PH’ (loss-cut-profit-hold) strategy. The following services that are promoting practical use are services that enable equity investment based on advanced finance theory and investment method, even for customers with little investment experience, utilizing AI forecasts and trend analysis . It is the first attempt in Japan to provide services utilizing AI stock price prediction for individual customers, and we are also applying for international patents. We aim to offer to customers who have an account at SMBC Nikko Securities in the first half of 2019. HEROZ can successfully crunch the huge amount of data on consumers’ deposit and withdrawal information, and data from social networks, to assist banks when they are making decisions on giving out loans and deciding whether customers are creditworthy. Our AI also helps in abnormal transaction detection in which we learn past transaction information etc. and automatically detect and notify candidates for abnormal / fraudulent transactions.”
“HEROZ aims to be a tech group where excellent AI engineers gather. Engineers account for three-quarters of the 40 members, 70% of which are engaged in developing AI and algorithms. For example, developers of Shogi AI ‘Ponanza’ and ‘Apery’ are from NEC Central Research Laboratory and engineers who published basic theory on Mahjong AI and are regulars in the ‘Supercomputer Contest’. A major feature is that all the engineering teams are in a almost flat relationship. In order for employees to have fun working, we have created an environment where we can express our opinions freely and fully demonstrate our creativity. It is an organization form in which leaders are born for each project. Sony’s Akio Morita also supported genius engineers such as Masaru Ibuka's curiosity and chunk of inquiry and prepared an environment where you can immerse yourself in R&D as much as you like. The climate of SONY respects the pure feeling of engineers who want to please people with technology and innovations that change the world have been born one after another. Environments in which competent human resources can demonstrate themselves sufficiently to compete with your own abilities, and ‘impurities’ such as titles and hierarchical relationships are not mixed. We want to create a company where people can fully demonstrate their 100% ability and can enjoy the work. There is growth of HEROZ when we promote things quickly and value the climate that respects the individual's capabilities. This is the starting point. I think that it is still an endless journey. I want to grow while cherishing the thought that ‘I want to impact society’ and ‘I want to create a service that surprises the world.’”
Ryo Higuchi 樋口龍 of Japan's GA technologies (TSE: 3491)
“Purchasing of real estate requires five processes: (1) Learning/ Opportunity, (2) Property search, (3) Examinations/ Contracts, (4) Renovation, (5) After-purchase follow-up & Asset management. But all other real estate portal sites consider only the search part and the transaction trigger in contracting is executed by the real estate agent company. Renosy can do all these five processes on one platform and make it possible to receive immediate feedback from the customer to identify the purchasing process and user experience to be improved. Our company is a real estate digital platform that enables consumers (sellers & buyers, lessors & lessees) to realize smart and secure real estate transactions in ‘search’, ‘negotiate’, ‘contract’, ‘purchase’ online.”
“By implementing our patented ‘Smart Contract’ based on blockchain (distributed ledger) technology within this platform, complex real estate operations such as contracts, settlements, asset movements, registration, which have been considered difficult to digitize in the past, are digitized to low cost and are also safe and secure. Smart Contract refers to the automation in the execution of contracts. With a computer protocol intended for smooth verification, execution, and negotiation of contracts, it is possible to enter into a contract by processing transactions secured by credit without going through a third party. We also aim to revitalize real estate distribution as a whole by providing substantial business improvement and cost reduction to real estate operators who are responsible for intermediary operations.”
“I have a strong desire to revitalize the Japanese second-hand real estate market. The real estate market in Japan is around 70% new and 30% second hand. In Europe and the United States, it is the opposite, 10% new construction and 90% used. OECD member countries restrain new building as an attempt to supply housing according to population growth. In the Japanese society with a declining population, 40 to 500 thousand households are supplied with new units, but around 1 million new units are being supplied currently, which has become a social problem. In contrast, the number of closed transactions in second-hand units is 179,000. Also, 70% of people have never renovated in Japan. In order to revitalize the used real estate market, it is necessary to correctly evaluate the value of second hand real estate and make it easy to buy.”
“The real estate industry is a business that has characteristics such as home construction law and high-priced products and is not complete with just only the internet. If it is a internet-based company in the real estate area, the advertisement model or subscription tends to become the majority in the composition of sales. However, I think that advertising models will not grow unless they can take to a scale like TV or LINE. The market size of real estate advertisement is only about 150 billion yen. On the other hand, real estate transactions has a market of about 40 trillion yen annually. However, if you think about doing real estate such as apartment development project, even if sales are 10 billion yen, the risk is big with debts on the same scale or half of sales. As a result, real estate companies that grew rapidly in this scheme are going bankrupt except for big keiretsu conglomerates.”
“Real estate platform that searches for second-hand properties have been around since long ago which has made it easier for real estate brokerage firms to attract customers. However, many tasks in the operations are still analog, such as the purchase and management of properties, preview, contract preparation and so on. As various people are involved until the contract, the cost burden increases, and it becomes an inefficient transaction that is wasteful for customers.”
“The traditional property site can only browse properties that you are looking for, and it was difficult to understand the price quotation in the area. Therefore, Renosy also purchases information from other companies and also provides pricing information on the occupying property. It also has a function to estimate prices using artificial intelligence (AI) technology which we have learned and calculate about 250 million transaction records and interest rates in the past 10 years for residences in our service target areas to support user's decision making.”
GA technologies (TSE: 3491) (“GAT”) is “Japan’s Amazon in real estate”, the leading second-hand real estate distribution platform through “Renosy” (https://www.renosy.com), distinguishing itself from all other ad-based search portals as the only end-to-end matching platform in Japan that integrates (1) Search, (2) Mediation-Brokerage-Contracting, Buying & Selling (3) Renovation, (4) Rental, and (5) Aftersales Follow-Up & Asset Management to members, and utilizing AI and blockchain technologies to realize a smarter user experience at lower cost. Renosy charges a 2.5% online brokerage commission as compared to the general offline brokerage commission fee of 3% + 60,000 yen. The number of second-hand real estate transactions sold and handled by GAT has doubled to 1,000 in FY2018/10 (200 in FY2016/10) and the number of registered Renosy members is around 32,000. Over 37,000 and 179,000 transactions in second-hand real estate were closed in Tokyo and nationwide respectively, which has increased steadily 30% over the past ten years, indicating a potentially huge total addressable market and a long runway for growth for GAT. In addition, the second-hand real estate distribution share in Japan at 37.4% is substantially lower than in US (~90%) and Europe (UK: ~86%, France: ~64%) and is steadily increased from 22.3% in 1998 as Japanese become increasingly receptive to purchases of resale houses. The year 2016 also marks the first time that second-hand real estate transactions exceed that of new units.
GAT also generates revenue in the planning, design, construction management in renovation with the required licenses. GAT has developed its own proprietary real estate AI X RPA (robotic process automation) support tool “Tech Series” and the “Renosy Insight” app for real estate owners. The Renosy Insight app also offers an online rental management service to members at 1,100 yen per month. GAT acquired ASSURENT Legal Co in Sep 2018 for US$8.8m and ITANDI in Oct 2018 for US$16.27m. ITANDI develops B2B SaaS (Software-as-a-Service) cloud tools using AI and big data analysis for real estate management companies and brokerage firms in the rental area. ASSURENT Legal Co provides warranty service for real estate lease.
Tomomichi Takahashi 高橋知道 and Nobuyuki Osumi 大角暢之 of Japan's RPA Holdings (TSE: 6572)
“Thirty years ago a person who was able to operate a personal computer was considered a hero, but everyone became able to use it like a tool thanks to Bill Gates. After ten years, the Internet became popular and it became another tool which require us to be able to master it. Smartphone appeared ten years later. Initially it was a toy-like device, but due to the increasing sophistication and popularization of app functions, everything including digital wallets entered into smartphone, creating dramatic changes in life. We believe that the spread of RPA and AI will fundamentally change and redefine the structure of many businesses and raise the productivity of white collar workers dramatically in the coming decade. RPA will be a ‘stationery’ which is easily used by anyone without any special knowledge and that every white collar worker will use every day. Everyone can design and create a RPA software robot that matches their business. Then, even if there is a change in the work flow and business rules change from tomorrow, people in the field can change on the spot and respond immediately. The history of productivity revolution using technology is a series of such things when they make it to the level that you can use it like that. RPA will become the reading and writing of the future era. Personal computer, internet, smartphone and RPA will be basic business skills and RPA will be a powerful weapon for many companies. The future of the company and the Japanese economy will change depending on how you use the time of the person who created the RPA software robot. You can devote your free time to designing more efficient business processes, or you can use it for developing new businesses and products with higher added value. What is important is getting the degree of freedom about how to use the time created by productivity improvement.”
“The office work in Japan is individualized for each company, and there are many customized work. So if you try to automate your work using office automation (OA) or business process re-engineering (BPR), it will cost more. Because of this problem, Japan's OA has not progressed so far. To solve this problem, RPA aims to solve with the idea that business flow is analogue and office work can be automated using RPA software robot without changing the flow.”
“As an example, let's consider the case of collecting paper receipts and posting in the accounting department of the company. Until now, information such as the amount stated on the receipt, company name, date of payment, and so on, was input manually to each cell of Excel or ERP accounting system, and a huge amount of work was required. According to the idea of OA conversion in the past, it is said to introduce a system that can exchange payment information online without issuing a paper invoice in the first place, but in Japan such thought did not spread easily. On the other hand, RPA says that it is inevitable to receive a paper receipt itself, and instead it scans the receipt and turns it into OCR, and automates the process of filling each numerical value in the target cell. The idea of such RPA is drawing increasing attention.”
“The difference between Excel Macro and RPA is that In order to assemble a macro, you will need to gather personnel with expertise on macros and do programming work. So with this method, the company has to pay enormous cost to achieve automation and only for a single task. In the case of RPA, on the other hand, by simply pressing the start button, we will automatically record (log) the flow of series of office work actually done by humans and remember it. When you select one step in the flow, there is also a feature that the screen scene is displayed, so it's easy to extend, change and modify. RPA's groundbreaking point is that you can teach the work of human beings directly without relying on programming.”
“It is often said that Japanese people have very good abilities when viewed on an individual level, such as mathematical literacy which ranks high in the world. However, according to the OECD survey, Japan's labor productivity is the lowest in G7. This situation has not changed for a long time. When an excellent individual enters into the organization, he or she cannot demonstrate their ability sooner. The cause is that there are many cumbersome tasks in the company, such as stamping on the form and circulation of the approval note, and individuals are being forced to handle such miscellaneous work, leaving less time to creative work, so productivity does not rise at all. Also, when you get such extra work tasks, those with more free time would slowly go through their existing work and began to pretend to be working hard. Japan's labor productivity can be greatly improved if this miscellaneous affair can be automated. RPA is effective as a breakthrough.”
LEE Kyung-min 이경민 of Korea's Minwise (KOSDAQ: 214180)
“The Internet and mobile presented us with an ocean of endless information and tremendous convenience, but at the same time we had to worry about endless information leakage and the inconvenience of remembering more information. The problem we need to solve today is to maximize convenience, but minimize worry and discomfort. In March 2009, Min Angie was born after thinking about 'Is there any way that anyone can use the Internet and mobile without worrying about convenience and security?’ Minwise has also invested in SettleBank, which is the number one virtual bank account settlement services company and is growing further through synergies between Minwise and family of companies. All the services Minwise introduced to the market have a common point of view in terms of providing user's convenience and useful service. This is Minwise's service philosophy. Minwise likes the blue ocean that others have not seen and is pursuing a business with a long life cycle. We look forward to the company as a platform for employees to grow. We are steadily growing based on the fact that we are leading the blue ocean market that drives IT trends for every service we offer and that we have a stable profit structure through a large number of business partners. We look forward to a real leap forward as a convergent IT company providing original services that enriches people’s lives and we will take on social responsibilities as a convergence IT company. I hope you will keep an eye on Minwise's steps to create a better world and we ask for your support and encouragement.”
“Many wonder about the mission of Minwise. 'Min' comes from the last letter of my name, and if you disassemble 'min' one by one, it becomes the abbreviation of 'Mobile Internet Network'. And because it is a knowledge business, it means wisdom is important.”
Toshimasa Itaya 板谷敏正 of Japan's Property Data Bank Inc. (TSE: 4389)
“The timely consolidation of business information and collaborative information sharing is indispensable for the management of modern real estate and facilities. Our vision is to revolutionize our customer's operations through aggregation of knowledge and value improvement to our customer assets. Real estate and facilities targeted by our customers are distributed all over the country. The skills of these administrative controls for close business collaboration among local management entrustees, branch offices, and the headquarter that controls them are not common. It is possible to dramatically improve business efficiency by linking real estate owners and management consignment companies in real time. We provide the integrated property management cloud service ‘@property’ with the aim to improving operational efficiency supporting the operation management of real estate and facilities owned by customers.”
“Individual, corporate, and public real estate holdings in Japan are said to be worth 2,300 trillion yen. The Japanese real estate investment market is the second largest in the world (the largest in Asia) and approximately 10% of the world’s real estate investment market is concentrated on this small nation. A seismic revolution is occurring at the moment in Japanese real estate in demanding more effective utilization of real estate, further streamlining of management, and greater investment stability. This includes the rise of real estate securitization since the year 2000, the evolution of the corporate real estate (CRE) strategy that is reviewed as the source of corporate competitiveness, and the venturing into the public real estate (PRE) strategy.”
“The center of our customer base is J-REIT, and our @property commands around 60% share for J-REIT as a real estate and facility operation management tool. We are proud that @property is the de facto standard for J-REIT. The strength of the business is the height of entry barriers. In the case of REIT, we studied the characteristics, such as high disclosure frequency and precision of data required to report to investors and regulators. The corporate accounting processing is very complicated and strict. We noticed these needs and addressed it from the very beginning of the cloud service. In ordinary accounting software, data cannot be carried over when closing the previous year and information on operational performance is not included in the accounting software. For example, no vacant room rate data will come out. However, if you work closely with the performance of real estate and accounting, smooth correspondence is possible such that you can respond immediately when a vacant room comes out or if a cancellation notice is made and red flags get up. What is important is that you can always see it as a stream without closing the data every year. This is the point of the cloud services.”
“Our main customers are asset management companies such as real estate investment funds (J-REITs); real estate management companies that manage assets; facility management companies such as building maintenance companies; businesses owning real estate such as automobile manufacturers and others using real estate; general operating companies such as infrastructure companies, and public enterprises such as national and local governments. By combining the function of @property according to the purpose of use of the customer and the scope of business etc., we respond to the needs of various fields related to the management of real estate and facilities of enterprises.”
“Other customers include building maintenance companies, life and non-life insurers (e.g. Tokio Marine & Nichido Fire Insurance), real estate companies (e.g. Kenedix Inc. (TSE: 4321)), general corporations owning real estate (e.g. Panasonic), local government (Tokyo Metropolitan Government, Shiga prefecture government), etc. While we already account for around 60% of the J-REIT market, the remaining 40% of J-REITs are not likely to use our services from their own capital ties, and it is difficult to raise the market share for J-REITs.”
“However, we still have enormous expansion scope and a long runway for growth in the building maintenance and generate CRE field. There are 882 building maintenance companies with a capital of 50 million yen or more nationwide, but our building maintenance customers are still only 31 companies, or 3.5% share. We have introduced ‘Building Maintenance Edition’ aiming at a standard core system of cloud type building maintenance work from Nov 2018 and released all functions in Jan 2019. In addition, there are 1,781 general CRE companies nationwide with capital of 1 billion yen or more, excluding finance, of which only 41 of them are our customers, or around 2.3%.”
How to Know If We are Right for Each Other?
You are an intelligent high net-worth investor, business owner, family office, institutional investor, allocator, or financial advisor who want to:
- You want to learn and be well-informed about disruptive forces and innovation, new technologies and new business models coming up, and the companies that ride on and benefit from them in some of the most promising areas of the economy, and feel more confident in your knowledge in how these innovators are indispensable in the well-being of your daily life.
- Yet, you do not wish to follow the crowd like everyone else to herd in the popular mega-cap tech stocks.
- And you definitely do not want to fall for the Next-Big-Thing trap by investing in fads, me-too imitators, cash-burning tech companies, or even in seemingly cutting-edge technologies without the ability to monetize and generate recurring revenue with a sustainable and scalable business model, and you want to know how to distinguish between the true innovators and the swarming imitators.
- You want to be proud of the entrepreneurs and owner-operators running the companies, that they are honorable, high-integrity, far-sighted, and have a higher sense of purpose in solving High-Value Problems for their target customers and society, and have unique, scalable and wide-moat business models with sustainable competitive advantages and innovative products, services, and processes to grow profitably through up/downturns in the economy, as opposed to imagining a certain tech category and then finding someone in that category.
KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to H.E.R.O., KB was the Portfolio Manager/Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investment.
KB was also the Managing Editor of the Moat Report Asia, a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia. Subscribers to the Moat Report Asia from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, hidden billionaires and savvy private individual investors who are lifelong learners in the art of value investing.
KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Detecting Accounting Fraud in Asia as an official module at the SMU. KB remains grateful to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community.
Selected media archives:
- Scouring Accounting Footnotes to Prevent Tunneling Fraud, Business Times, 19 Aug 2015 (PDF)
- Reforming Corporate Governance, Business Times, 25 Nov 2000 (PDF)
- The Secret to Business Resilience: Be Like the Bamboo, Not the Oak, TODAY, 8 April 2013 (PDF)
- Creating Bamboo Innovators in Singapore, Straits Times, 1 April 2013 (PDF)
- 管理狮城的狮子企业家 The Power of Vision, Business Times, 15 May 2000 & Lianhe Zaobao, 9 Aug 2010 (PDF)
- Why ‘Democracy’ and ‘Drifter’ Firms Can Have Abnormal Returns: The Joint Importance of Corporate Governance and Accounting Quality in Separating Winners from Losers, Review of Social, Economic and Administrative Studies, Vol. 25 no. 1 (2011): 3-55. (PDF)
Feedback from my students at the Singapore Management University
I am fortunate to have the chance in helping the students to acquire the required technical accounting competencies and sharing with them the importance of sharpening their critical thinking skills and embracing the right values and ethics over the course of my teaching as a full-time faculty member at the School of Accountancy, Singapore Management University.
Some kind feedback from the students include:
- “I am writing to show my gratitude for Prof Kee Koon Boon for his outstanding teaching. As a graduating student in SMU and through my four years education in SMU, Prof Kee is one of the most passionate and knowledgeable lecturers/professors that SMU has.. I cannot emphasize how important is this module to accounting and finance professionals. There have been widespread media reports on accounting fraud scandals in China-based companies. To put it across bluntly, these reports are ex-post and the harm has been done. What the public needs is ex-ante reports to identify these potential accounting frauds. Despite me getting A+ for Financial Accounting module, Management Accounting module and Corporate Reporting & Financial Analysis module, it never occurred to me to judge the accounting numbers beyond their face value. This module has brought great insights to me through the various methods taught to detect accounting fraud. For SMU to continue producing excellent financial professionals, this module on Accounting Fraud should be expanded to take in a larger amount of students genuinely interested in this subject.”
- “I was moved into writing this letter of appreciation letter for Professor Kee Koon Boon for his work done for the module Accounting Fraud in Asia. This module.. will undeniably be one of the most useful course SMU undergraduates will find themselves taking.. his exemplary teaching quality and methods will continue to help nurture graduates with an edge who will be highly sought after by corporations. What Prof Kee is teaching is vitally important, because most accounting systems today are focused on post-mortem fraud, investors today are not equipped with the vital skill of fraud detection ex-ante.. His constant encouragement.. shows his deep concern for our core growth and maturity, not just in terms of academic development and technical skills, but also in terms of our character development and desire to do good for society. He is truly an educator and a teacher, in every sense.”
- “I am touched by your spirit and passion, so keep this teaching style spirit going and impact more students! With that, I would like to thank you for the sharing session from interview to fraud class lessons as well as thank you for leading me in finding the energy of myself.”
- “Besides the technical skills and knowledge, I think there are other aspects of my life that you "value add" to. For example, how to persevere and be positive, how to "hold on together" so that "our dreams will never die". These are values which other professors will not share. You are one of the most dedicated, hardworking and "on the ball" professors that I have come across.“
- “I have thoroughly enjoyed your lessons so far. In fact your lessons are something that I look forward to during the week. After working in the hedge fund industry for 8 months last year, I find that it is really rare for someone like you to come out and share your insights and experiences with the world, or even to undergraduates like us without expecting anything in return. I truly admire your spirit and generosity that is similar to that of Benjamin Graham or Bruce Greenwald, reputable masters in their own rights. The learning goes beyond the classroom, and the website is a great tool for students and the general investing public to learn as well. At the end of the day, what really matters is how much value you have added in this world. For that, I believe your work has benefited many of the enthusiastic students in class and have educated investors who are keen to invest in Asia but are looking to arm themselves with background knowledge to finesse their way through the Asian capital jungle.”
- “Right on the cusp of entering the working world, we are thoroughly grateful to be on this journey with you. And I say this in a continual manner because I’m certain our journey doesn’t end here. Thank you for your generosity in sharing your knowledge with the class. Thank you for your passion in uncovering fraudulent activities for the good of investors and the quest for rightness. Thank you for your being the genuine spirit that you are, truly committing yourself to the noble cause of educating us and leading us along with you in the pursuit wisdom and character.”
- “There is no thread of doubt that we are learning highly proprietary and beneficial stuff from you and the goodness is beginning to take shape in us slowly. These seeds once sown will grow further with time and I must thank you for showing us to the gates of this new realm and equipping us with the necessary weapons to outlast if not conquer the Asian Capital Jungle eventually. Beyond these, having been through 7.5 semesters with just 5 weeks of SMU life remaining, I must tell you that I count myself really fortunate to have taken your class right before leaving school. I must honestly say that you are the most enthusiastic Prof I’ve met in school and just like the video of the Chinese singer you showed us in class, your great work shines through and has inspired me a lot. Beyond technicalities, it has taught me to be really really thorough in the pursuit for excellence, esp as a young entrant into the financial industry. Your class contains the most practical wisdom compared to other mods in SMU and all this are what ‘true value’ in education really mean.”
- “Thank you for your passion and guidance during the past 4 months. Through this course, I was able to see the various ways accounting fraud can be perpetuated in Asian society. I indeed have a greater awareness of my own shortcomings and have a clearer sense of direction on which career path I should choose in future - to avoid being swayed towards greed and worldly pleasures but instead lead a life of sufficiency, gratefulness and service.”
- “Thank you for the effort and dedication in the materials & speakers you have provided for us! I have learnt knowledge that have been picked up from valued experiences from yourself as well as speakers like Mr Hemant Amin, knowledge that I would not be able to amass unless through the course. I am thankful to have taken Accounting Fraud because you have taught us values together with knowledge. A compass that will continue to guide us in our journey.”
- “The instructor is very dedicated to his job… He also has great experience and insights into current issues and always tries to bring them into context with what we are learning.”
- “… willing to share his insights into different subject matters and let us think deeper into what is taught to us.”
- “… a very caring and understanding professor who takes the effort to encourage students - concepts learnt can be readily applicable to the working world”.
- “… a very responsible and helpful professor who is willing to share his insights to the class. He is also extremely knowledgeable in many aspects and there is a lot to learn from him.”
- “Prof is very approachable and I’m most impressed by his sincerity and passion in sharing valuable lessons with us.”
- “Patient, kind, caring and considerate of individual, special needs of students. Always warm and approachable.”
- “Prof Kee has inspired me with his enthusiasm in learning and the vast knowledge that he possessed. He was very willing to share his wisdom with us and is definitely a great teacher.”
- “Prof Kee is very friendly prof. He makes an effort to get to know each student and is genuinely interested in the conversations of us students. He is also very knowledgeable and passionate about learning. His sincerity is heartwarming and he is a good role model for students. Thank you Prof Kee!”